The disruptive power of the digital payment platforms - case Biohacker
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School of Business |
Master's thesis
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Authors
Date
2018
Department
Major/Subject
Mcode
Degree programme
Information and Service Management (ISM)
Language
en
Pages
73
Series
Abstract
The volumes in e-Commerce-based business have been growing rapidly. One reason for this might be that the world has become borderless, thanks to the Internet. When you buy electronic goods the delivery, from the moment of purchase to receiving, can be fast. It could be done immediately due to its electronic format. Without suitable payment methods there might be a delay in the process. Traditional ways of paying cannot satisfy the growing and more demanding needs of e-Commerce. There needs to be better payment methods available. The solution should be cost-effective and widely enough accepted. Many electronic payment systems have been available for years. Several of them have faced extinction for various reasons. At the moment there seems to be a wide range of payment providers in the market. Electronic payment can be stated to be a digital payment when characteristics are electronic format and real-time authorization. These payment platforms have been defined to be two-sided. On one side are the companies who sell the goods and the other side are the customers who buy the goods. The problem lies on how a company, who sells electronic goods worldwide, can ensure its customers that they are able to purchase the goods. There should be a suitable method available for everyone. This thesis is a single case study and it seeks answers to the problems which are related to the selection of payment platforms. At the moment the case company is participating in several payment platforms and accepts also virtual currency Bitcoin as a payment method. The data for the study consisted three parts, where first one was the data from the case company’s payment platform databases, second was the comparison table filled with publicly available information of the payment platforms and third the interviews with the key persons from the case company. The implications showed that the key points in selecting a payment platform relies on evaluating the network effect and ensuring being part of a valuable platform. We can also say that being part of a platform which has plenty of cross-side users is valuable. Transaction costs can be reduced when the payments are transmitted through these platforms. Even lower transaction costs can be achieved by using virtual currency. However, there are at the moment legal, technical and security concerns related to the virtual currencies. Joining in an ecosystem can be seen as a good choice since it might enable access to other platforms. It could also provide wider range of additional features which company can benefit from. At the end there might still be issues which require help from the traditional payment methods.Description
Thesis advisor
Tuunainen, VirpiKeywords
digital payment, payment platform, e-commerce, virtual currency