Competing Models for the Mobile Payment Ecosystem in Japan, South Korea and China

Abstract

In this paper, we explore the evolution of mobile payment models in China, comparing it to the longer-established and more advanced models in Japan and South Korea to identify possible developmental trajectories. With similar social and cultural backgrounds, and comparable penetration of mobile phones and mobile broadband, Japan and Korea present feasible operational models for China. Using the industrial organization model, this paper compares the industry structure and behavior of firms, specifically the patterns of cooperation and competition between companies at different levels of the mobile payment value chain. We also analyze the differential impact of regulation in the three countries. The findings suggest some convergence of mobile payment models in China, but a higher probability of the coexistence of multiple models in the near term. In conclusion, we speculate on the possibility that the Chinese model might converge to either the Japanese or Korean model, as the Chinese mobile payment market continues to grow and evolve.