Towards a Market Entry Framework for Digital Payment Platforms

Erol Kazan, Jan Damsgaard

    Research output: Contribution to journalJournal articleResearchpeer-review

    Abstract

    This study presents a framework to understand and explain the design and configuration of digital payment platforms and how these platforms create conditions for market entries. By embracing the theoretical lens of platform envelopment, we employed a multiple and comparative-case study in a European setting by using our framework as an analytical lens to assess market-entry conditions. We found that digital payment platforms have acquired market entry capabilities, which is achieved through strategic platform design (i.e., platform development and service distribution) and technology design (i.e., issuing evolutionary and revolutionary payment instruments). The studied cases reveal that digital platforms leverage payment services as a mean to bridge and converge core and adjacent platform markets. In so doing, platform envelopment strengthens firms’ market position in their respective core markets. This study contributes to the extant literature on digital platforms, market entries, and payment.
    Original languageEnglish
    Article number37
    JournalCommunications of the Association for Information Systems (CAIS)
    Volume38
    Issue number1
    Pages (from-to)761–783
    ISSN1529-3181
    DOIs
    Publication statusPublished - 2016

    Keywords

    • Payment platforms
    • Digital payment
    • Multi-sided
    • Platforms
    • Market entry
    • Platform envelopment

    Cite this

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    abstract = "This study presents a framework to understand and explain the design and configuration of digital payment platforms and how these platforms create conditions for market entries. By embracing the theoretical lens of platform envelopment, we employed a multiple and comparative-case study in a European setting by using our framework as an analytical lens to assess market-entry conditions. We found that digital payment platforms have acquired market entry capabilities, which is achieved through strategic platform design (i.e., platform development and service distribution) and technology design (i.e., issuing evolutionary and revolutionary payment instruments). The studied cases reveal that digital platforms leverage payment services as a mean to bridge and converge core and adjacent platform markets. In so doing, platform envelopment strengthens firms’ market position in their respective core markets. This study contributes to the extant literature on digital platforms, market entries, and payment.",
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    Towards a Market Entry Framework for Digital Payment Platforms. / Kazan, Erol; Damsgaard, Jan.

    In: Communications of the Association for Information Systems (CAIS), Vol. 38, No. 1, 37, 2016, p. 761–783.

    Research output: Contribution to journalJournal articleResearchpeer-review

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