The Race to Dominate the Mobile Payments Platform

Entry and Expansion Strategies

    Research output: Contribution to journalJournal articleResearchpeer-review

    Abstract

    The payment market has been stable for a number of decades with well-defined roles (acquirers and issuers), profitable business models (the card schemes) and a dominant design in which the merchants absorb the costs associated with payments. However, numerous digital payment solutions, which rely on new disruptive technologies, are emerging on the payment market, transforming the payment area from being established into a state of flux. In this article, we investigate the various factors that determine the success of a given solution. To this end, we build a framework to analyze the entry and expansion strategies of the digital payment solutions. We claim that the timing of entry of the first-mover speeds up the timing of entry of the early follower, thus determining the order of entry. We also argue that the timing of expansion is of equal importance as the timing of entry. If the expansion is not executed within the optimal time, the previously gained competitive advantage can be annulled.
    Original languageEnglish
    Article number602
    JournalElectronic Commerce Research and Applications
    Volume14
    Issue number5
    Pages (from-to)319-330
    Number of pages12
    ISSN1567-4223
    DOIs
    Publication statusPublished - 2015

    Cite this

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    title = "The Race to Dominate the Mobile Payments Platform: Entry and Expansion Strategies",
    abstract = "The payment market has been stable for a number of decades with well-defined roles (acquirers and issuers), profitable business models (the card schemes) and a dominant design in which the merchants absorb the costs associated with payments. However, numerous digital payment solutions, which rely on new disruptive technologies, are emerging on the payment market, transforming the payment area from being established into a state of flux. In this article, we investigate the various factors that determine the success of a given solution. To this end, we build a framework to analyze the entry and expansion strategies of the digital payment solutions. We claim that the timing of entry of the first-mover speeds up the timing of entry of the early follower, thus determining the order of entry. We also argue that the timing of expansion is of equal importance as the timing of entry. If the expansion is not executed within the optimal time, the previously gained competitive advantage can be annulled.",
    keywords = "Digital payment platforms, Entry strategies, Expansion strategies, Financial services, Lock-in effects, Mobile payments, Multi-sided platforms, Network effects, Technology strategy",
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    The Race to Dominate the Mobile Payments Platform : Entry and Expansion Strategies. / Staykova, Kalina Stefanova; Damsgaard, Jan.

    In: Electronic Commerce Research and Applications, Vol. 14, No. 5, 602, 2015, p. 319-330.

    Research output: Contribution to journalJournal articleResearchpeer-review

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