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Third-party Payment and Commercial Banks in China: Friends or Enemies?

Published: 14 January 2022 Publication History

Abstract

This paper explores the effect of third-party payment on the profitability of Chinese commercial banks from 2013 to the second quarter of 2020. In China, third-party payment has developed quickly in recent years, and an increasing number of people choose to pay by third-party payment instead of cash and bank card. This would have impacts on the Chinese traditional financial business, especially the banking industry. In order to find whether third-party payment impacts on commercial banks’ profitability or not, this paper selects the data of 36 listed banks for empirical analysis. The regression result shows that third-party payment has a significant positive impact on Chinese overall commercial banks. Then, for different types of banks, third-party payment has significant positive impacts on state-owned and joint-equity banks. But for urban and rural commercial banks, the regression results are poor fitting. Finally, this paper employs fixed effects model to run regressions, and results are still positive. Therefore, banks should continue to maintain a good corporative relationship with third-party payment.

References

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IResearch. Research Report on China's third party payment industry in 2020. Retrieved April, 2020 from https://www.iresearch.com.cn/report.shtml
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Shuhua Mao, Min Zhu, Xianping Wang and Xinping Xiao. 2020. Grey Lotka–Volterra model for the competition and cooperation between third-party online payment systems and online banking in China. Applied Soft Computing. 95 (October 2020), 106501. https://doi.org/10.1145/1177352.1177355
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Xinyue Zhang and Weijie Wu. 2020. The influence of the development of third-party payment on Commercial Banks. Economic Research. 6 (June 2020), 52–54.
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Jing Wang. 2020. The influence of the development of third-party payment on Commercial Banks. China Small Medium Enterprises. 2 (January 2020), 195–196.
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Xizhuo Chen. 2020. An empirical analysis of the impact of third-party payment on the profitability of commercial banks: GMM model based on system. China Small Medium Enterprises. 1 (February 2020), 43–46.
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Taifeng Xie and Ke Liu. 2019. An empirical study on the impact of third-party payment on the profitability of commercial banks in China. Financial Theory and Practice. 10 (September 2019), 65–71.
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Haifeng Gu and Jun Yan. 2019. Internet Finance and CommerciaI Banks Profit:Inhibition or Promotion: Based on Profit Ability and Profit Structure. Modern Economic Science. 41, 4 (June 2019), 100–108.
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Zhenzhen Huang. 2020. The Influence of the Third Party Payment on the Payment and Settlement Business of Commercial Banks. Journal of Harbin University. 41, 2 (February 2020), 49–52. https://doi.org/10.3969 /j.issn.1004-5856.2020.02.014
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Ruolin Wang. 2020. The influence of the third-party payment on the payment and settlement business of commercial banks. Shangxun. 20 (July 2020), 75–77.
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Qiudan Xing, Jia Hei, and Liuyue Pu. 2018. Analysis on the Influence of the Introduction of NetsUnion on the Third-party Payment and UnionPay in China. In 2018 2nd International Conference on Education Science and Economic Management. Atlantis Press, 1219–1223. https://dx.doi.org/10.2991/icesem-18.2018.285
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Dongxiao Su. 2018. The influence of third-party payment on China's commercial banks. Finance Department, Capital University of Economics Business.
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ICMECG '21: Proceedings of the 8th International Conference on Management of e-Commerce and e-Government
July 2021
122 pages
ISBN:9781450390545
DOI:10.1145/3483816
Permission to make digital or hard copies of all or part of this work for personal or classroom use is granted without fee provided that copies are not made or distributed for profit or commercial advantage and that copies bear this notice and the full citation on the first page. Copyrights for components of this work owned by others than ACM must be honored. Abstracting with credit is permitted. To copy otherwise, or republish, to post on servers or to redistribute to lists, requires prior specific permission and/or a fee. Request permissions from [email protected]

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Association for Computing Machinery

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Publication History

Published: 14 January 2022

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Author Tags

  1. Commercial banks
  2. Profitability
  3. Third-party payment

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