Entry Strategy Of The Third-party Payment And Anti-competition Of China Unionpay

Continuous innovation on the technology and function of the third-party payment makes a great change in its role in the payment market. It has been transformed from the original Internet credit intermediary platform and Internet capital independent clearing platform to independent clearing platform for off-lined entity scenario payment market. A more convenient and efficient new mode of payment leaded by it has made the boundaries between online and offline payment more and more fuzzy, and makes a huge impact on the traditional methods of payment especially credit card payment. It has been achieved that the liquidation between the payer and payee does not depend on the independent liquidation payment function of China UnionPay’s settlement network, when using the new payment mode of the third party payment in the entity scene payment market. It is clear that the third party payment already entering into the payment market poses a serious threat to interests and market position of China UnionPay.This paper takes the third-party payment platform as study subject, the third-party payment platform is regarded as a platform provider which provides capital liquidation services for users in the two-sided market, the payer and payee namely consumers and merchants as the bilateral users of the third party payment platform provider. It explores the two-sided market entry strategy of the platform provider through building modal based on the two-sided market theory, makes a further illustration and analysis on the payment market entry strategy of the third party payment platform, including analysis of POS trade market entry strategy of the third-party payment, and analysis of entity scenarios market entry strategy of the third-party payment bypassing the clearing network of China UnionPay after China UnionPay implementing anti-competition. Through the model, we conclude that the third-party payment platform takes the profits from the internet payment market as low-cost subsidy to merchant to gain more users at the initial stage of entering the POS acquire-market. After China UnionPay set strong administrative barriers to the third-party payment platform, the third party payment platform enters into the new independent clearing payment market, it takes advantage of innovative payment technology and bargain offer to develop the payment habit of some consumers with cross-group network externalities to obtain a developing quantities of bilateral users and market position. It proves that the key strategies to bypass the barriers and enter into the entity scenarios payment market are the network infrastructure construction and application of innovative technologies, obtainment of a large number of user base. by subsidizing consumer to develop users’ payment habits.As the only liquidation organization in our payment market, China UnionPay occupies an irreplaceable important position in the payment market since its inception. However, from the competition between the third party payment and UnionPay’s UMS in the acquiring market at the initial stage when it does not include UMS to the entry into the new independent clearing payment market in which transaction is based on the entity scenarios without swiping card in recent years, the third-party payment has possessed of independent liquidation payment functions without of UnionPay settlement network, afterwards, it attempts to overhead and replace China UnionPay. In order to ensure their own interests without loss, China UnionPay takes some anti-competition against the third party payment, including excludability of restrictive competition, abuse of market dominant position and so on, such improper anti-competition has bad influence on the payment market. This paper analyzes China UnionPay’s specific anti-competition against the third-party payment, and draws a conclusion the anti-competition and monopolization of UnionPay puts a positive long-term and short-term effect on the rate of acquire-market. At last, this paper puts forward the suggestions on regulation of China UnionPay and makes policy recommendations for the good development of our payment market and the third party payment platform.