Abstract
The development of payment technologies has been very modest for the
last centuries. Even today cash transactions constitute a major share of the
low value payments. The new way of payment called contactless mobile payment
is aiming to change these very old payment habits. Contactless payment
technologies that are based on smart cards are already gaining wide spread
acceptance in several countries. Next step in the development is to build
contactless functionality into a mobile phone. This has been enabled by a new
short range wireless technology, which is referred as Near Field Communication
(NFC). Current problem at the mobile payment markets is that the main
stakeholders are competing with each other in order to ensure their position
at the emerging markets. However, at the same time stakeholders know that they
should co-operate to get the necessary critical mass of customers and
merchants behind the new technology. Therefore, the main goal of this thesis
is to find out possible competitive strategies of the major stakeholders and
to find out which of those strategies are best suited for the current
competitive situation at the mobile payment markets. Literature survey is used
for having an insight to the emerging mobile payment market structures and to
find out traditional competitive strategies for the pre-standardized
technology markets. Additional goal of this thesis is to find out which
factors play a part in the adoption of the mobile payments and how important
these factors are. These critical success factors are analysed using a
theoretical framework that is defined on the basis of literature survey. The
main results of this thesis indicate that there are several important factors
that can substantially affect the adoption of the mobile payments. Both
consumer and merchant acceptance is critical for the wide spread diffusion of
the technology. Relative ease of use to other payment methods and
compatibility with existing payment systems was found to be very important.
Additionally, merchants relative costs of accepting mobile payment
transactions should be at the competitive level, otherwise merchant acceptance
may be decreased. Furthermore, it was found out that consumer’s indirect
costs, such as fear of theft or lack of anonymity, have greater effect to the
chosen payment method than relative social costs, because many consumers seem
to be unaware of the actual costs of making payment. Game theory was used as
a tool in analysing competitive strategies of main business stakeholders.
Analysis provides support for the previous assumptions that stakeholders’
decisions to co-operate would be socially optimal strategy for the mobile
payments. Although the direct cooperation between banks and mobile network
operators may be difficult, trusted third party acting as an independent
platform manager might provide a resolution to this competitive situation
where socially optimal outcome is desired.
Original language | English |
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Qualification | Master Degree |
Awarding Institution |
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Place of Publication | Oulu |
Publisher | |
Publication status | Published - 2008 |
MoE publication type | G2 Master's thesis, polytechnic Master's thesis |