An Empirical Study Of The Impact Of The Development Of The Third Party Payment On The Commercial Bank's Profitability

The Third Party Payment is way to pay with the guarantee of credit,therefore,the buyers and sellers can have a successful transaction.The guarantee of credit is from the trustworthy and fully reinforced independent institution who singed a contract with the commercial banks.Thus,when they need to pay,they can connect with the bank's system to finish the online payment.The Third Party Payment platform is similar to the intermediary agent,whose value is to supervise the transaction and protect the interest of buyers.With the development of The Third Party Payment,it has impaired the original market portion of commercial banks,has caused a negative effect on the Net Interest Margins of commercial Banks,therefore to have a significant effect on the commercial bank's profitability.Combining the knowledge of finance major and the results which have been affirmed by the professors,basing upon the Third Party Payment's relation with the commercial banks' asset business and intermediate business,we theoretically analyse the effects of the Third Party Payment on the commercial banks' profitability from Net Interest Margin and Non-interest Income these two dimensions.And we collect the CIBC's quarterly statistics from 2007 to 2016 to conduct an empirical study verifying our theoretical models.And we also conduct empirical studies about the effect of the Third Party Payment on the NIM and non-interest income to examine the theoretic influencing mechanism.The ADF test,F-test,Hausman test and Granger Causality methods have been used in the empirical process.At last,based on the conclusions we have drawn,we put up with some policy suggestions to avoid the significantly negative effects brought from the Third Party Payment.Through our method,we have got three conclusions as following:(1)The Third Internet Party Payment has negative effect on the ROE of commercial banks,that is to say it would weaken the profit-making ability of commercial banks.(2)The Third party Payment has negative effect on the commercial banks' net interest margin,the increase of the Third Party Payment's scale would narrow the NIM of commercial banks.(3)The Third Party Payment has positive effect on the commercial banks,the non-interest income would increase with the development of the Third Party Payment.