A Framework for Analyzing Digital Payment as a Multi-sided Platform

A Study of Three European NFC Solutions

Erol Kazan, Jan Damsgaard

    Research output: Chapter in Book/Report/Conference proceedingArticle in proceedingsResearchpeer-review

    Abstract

    Near Field Communication (NFC) is a promising digital payment technology that is expected to substitute cash. However, despite its potential, NFC-based payment has not reached mass adoption on the customer nor on the merchant side. This paper constructs a preliminary framework for studying digital payment systems and analyzing strategies of current market actors, such as banks, mobile network operators, and merchants. These market actors are identified as incumbents or contenders, and they are currently jockeying for digital payment platform leadership. We analyze three different contactless payment systems implemented or planned by different actors in the European market. When synthesizing our observations, we note that all three multi-sided platforms (MSP) can provide fully functional and technically solid NFC payment systems. All three platforms seek to gain a foothold by subsidizing NFC payment instruments to their existing customer base. In addition, they extend their existing platform with other contactless services, thereby transforming existing cards (SIM or debit) from single-purpose to multi-functional cards. Our research extends existing payment literature from the MSP perspective to accommodate technological developments, where technology (NFC) and platform design impact market actor strategies and complementary products.
    Original languageEnglish
    Title of host publicationECIS 2013 Proceedings
    Number of pages12
    Place of PublicationAtlanta, GA
    PublisherAssociation for Information Systems. AIS Electronic Library (AISeL)
    Publication date2013
    Article numberPaper 155
    ISBN (Print)9783834924421
    Publication statusPublished - 2013
    EventThe 21st European Conference on Information Systems (ECIS) 2013 - Utrecht University, Utrecht Science Park 'de Uithof', Utrecht, Netherlands
    Duration: 5 Jun 20138 Jun 2013
    Conference number: 21
    https://sites.google.com/site/ecis2013nl/home

    Conference

    ConferenceThe 21st European Conference on Information Systems (ECIS) 2013
    Number21
    LocationUtrecht University, Utrecht Science Park 'de Uithof'
    CountryNetherlands
    CityUtrecht
    Period05/06/201308/06/2013
    Internet address
    SeriesProceedings of the European Conference on Information Systems
    ISSN0000-0034

    Cite this

    Kazan, E., & Damsgaard, J. (2013). A Framework for Analyzing Digital Payment as a Multi-sided Platform: A Study of Three European NFC Solutions . In ECIS 2013 Proceedings [Paper 155] Atlanta, GA: Association for Information Systems. AIS Electronic Library (AISeL). Proceedings of the European Conference on Information Systems
    Kazan, Erol ; Damsgaard, Jan. / A Framework for Analyzing Digital Payment as a Multi-sided Platform : A Study of Three European NFC Solutions . ECIS 2013 Proceedings. Atlanta, GA : Association for Information Systems. AIS Electronic Library (AISeL), 2013. (Proceedings of the European Conference on Information Systems).
    @inproceedings{46f2b030733e4e36bcf66c8d1300b43f,
    title = "A Framework for Analyzing Digital Payment as a Multi-sided Platform: A Study of Three European NFC Solutions",
    abstract = "Near Field Communication (NFC) is a promising digital payment technology that is expected to substitute cash. However, despite its potential, NFC-based payment has not reached mass adoption on the customer nor on the merchant side. This paper constructs a preliminary framework for studying digital payment systems and analyzing strategies of current market actors, such as banks, mobile network operators, and merchants. These market actors are identified as incumbents or contenders, and they are currently jockeying for digital payment platform leadership. We analyze three different contactless payment systems implemented or planned by different actors in the European market. When synthesizing our observations, we note that all three multi-sided platforms (MSP) can provide fully functional and technically solid NFC payment systems. All three platforms seek to gain a foothold by subsidizing NFC payment instruments to their existing customer base. In addition, they extend their existing platform with other contactless services, thereby transforming existing cards (SIM or debit) from single-purpose to multi-functional cards. Our research extends existing payment literature from the MSP perspective to accommodate technological developments, where technology (NFC) and platform design impact market actor strategies and complementary products.",
    keywords = "Payment, Credit cards, Multi-sided platforms, Near Field Communication (NFC), Contactless payment, Mobile payment, Payment infrastructure",
    author = "Erol Kazan and Jan Damsgaard",
    year = "2013",
    language = "English",
    isbn = "9783834924421",
    booktitle = "ECIS 2013 Proceedings",
    publisher = "Association for Information Systems. AIS Electronic Library (AISeL)",

    }

    Kazan, E & Damsgaard, J 2013, A Framework for Analyzing Digital Payment as a Multi-sided Platform: A Study of Three European NFC Solutions . in ECIS 2013 Proceedings., Paper 155, Association for Information Systems. AIS Electronic Library (AISeL), Atlanta, GA, Proceedings of the European Conference on Information Systems, Utrecht, Netherlands, 05/06/2013.

    A Framework for Analyzing Digital Payment as a Multi-sided Platform : A Study of Three European NFC Solutions . / Kazan, Erol; Damsgaard, Jan.

    ECIS 2013 Proceedings. Atlanta, GA : Association for Information Systems. AIS Electronic Library (AISeL), 2013. Paper 155 (Proceedings of the European Conference on Information Systems).

    Research output: Chapter in Book/Report/Conference proceedingArticle in proceedingsResearchpeer-review

    TY - GEN

    T1 - A Framework for Analyzing Digital Payment as a Multi-sided Platform

    T2 - A Study of Three European NFC Solutions

    AU - Kazan, Erol

    AU - Damsgaard, Jan

    PY - 2013

    Y1 - 2013

    N2 - Near Field Communication (NFC) is a promising digital payment technology that is expected to substitute cash. However, despite its potential, NFC-based payment has not reached mass adoption on the customer nor on the merchant side. This paper constructs a preliminary framework for studying digital payment systems and analyzing strategies of current market actors, such as banks, mobile network operators, and merchants. These market actors are identified as incumbents or contenders, and they are currently jockeying for digital payment platform leadership. We analyze three different contactless payment systems implemented or planned by different actors in the European market. When synthesizing our observations, we note that all three multi-sided platforms (MSP) can provide fully functional and technically solid NFC payment systems. All three platforms seek to gain a foothold by subsidizing NFC payment instruments to their existing customer base. In addition, they extend their existing platform with other contactless services, thereby transforming existing cards (SIM or debit) from single-purpose to multi-functional cards. Our research extends existing payment literature from the MSP perspective to accommodate technological developments, where technology (NFC) and platform design impact market actor strategies and complementary products.

    AB - Near Field Communication (NFC) is a promising digital payment technology that is expected to substitute cash. However, despite its potential, NFC-based payment has not reached mass adoption on the customer nor on the merchant side. This paper constructs a preliminary framework for studying digital payment systems and analyzing strategies of current market actors, such as banks, mobile network operators, and merchants. These market actors are identified as incumbents or contenders, and they are currently jockeying for digital payment platform leadership. We analyze three different contactless payment systems implemented or planned by different actors in the European market. When synthesizing our observations, we note that all three multi-sided platforms (MSP) can provide fully functional and technically solid NFC payment systems. All three platforms seek to gain a foothold by subsidizing NFC payment instruments to their existing customer base. In addition, they extend their existing platform with other contactless services, thereby transforming existing cards (SIM or debit) from single-purpose to multi-functional cards. Our research extends existing payment literature from the MSP perspective to accommodate technological developments, where technology (NFC) and platform design impact market actor strategies and complementary products.

    KW - Payment

    KW - Credit cards

    KW - Multi-sided platforms

    KW - Near Field Communication (NFC)

    KW - Contactless payment

    KW - Mobile payment

    KW - Payment infrastructure

    M3 - Article in proceedings

    SN - 9783834924421

    BT - ECIS 2013 Proceedings

    PB - Association for Information Systems. AIS Electronic Library (AISeL)

    CY - Atlanta, GA

    ER -

    Kazan E, Damsgaard J. A Framework for Analyzing Digital Payment as a Multi-sided Platform: A Study of Three European NFC Solutions . In ECIS 2013 Proceedings. Atlanta, GA: Association for Information Systems. AIS Electronic Library (AISeL). 2013. Paper 155. (Proceedings of the European Conference on Information Systems).