The impact of openness on the market potential of multi-sided platforms: A case study of mobile payment platforms

Journal of Information Technology

Volumn 30, Issue 3, 2015, Pages 260-275

  Ondrus, Jan ^a   Gannamaneni, Avinash ^b   Lyytinen, Kalle ^c  

^a ESSEC BUSINESS SCHOOL   (France)

^b MASSACHUSETTS INSTITUTE OF TECHNOLOGY   (United States)

^c CASE WESTERN RESERVE UNIVERSITY   (United States)

Author keywords

critical mass; market potential; mobile payments; mobile platforms; multi sided; openness

Indexed keywords

DECISION MAKING; GLOBAL SYSTEM FOR MOBILE COMMUNICATIONS;

CRITICAL MASS; MARKET POTENTIAL; MOBILE PAYMENT; MOBILE PLATFORM; MULTI-SIDED; OPENNESS;

ELECTRONIC MONEY;

EID: 84939798226     PISSN: 02683962     EISSN: 14664437     Source Type: Journal    
DOI: 10.1057/jit.2015.7     Document Type: Article

References (102)

1. Armstrong, M. (2006). Competition in Two-Sided Markets, The RAND Journal of Economics 37(3): 668-691
2. Arnfield, R. (2013). When a telco turns to banking [WWW document] http://www.mobilepaymentstoday.com/articles/when-a-telco-turns-to-banking/ (accessed 20 February 2015
3. Aruksakunwong, N. (2011). Google Wallet - Search giant's attempt to capture the lucrative mobile payment market [WWW document] http://www.online economy.org/googleffwallet-%E2%80%93-search-giant%E2%80%99s-attemptto-captureffthefflucrativeffmobileffpayment-market (accessed 20 February 2015
4. Baldwin, C.Y. and Woodard, C.J. (2009). The Architecture of Platforms: A unified view, in A. Gawer (ed.) Platforms, Markets and Innovation, Cheltenham, UK and Northampton, MA: Edward Elgar Publishing, pp 19-44
5. Balaban, D. (2013a). Sprint to Take on ISIS with 'Open' NFC Platform; Won't Offer Own Wallet [WWW document] http://nfctimes.com/news/sprint-takeisis-open-nfc-platform-shuns-own-wallet (accessed 20 February 2015
6. Balaban, D. (2013b). People on the Move: Early ISIS Planner Bierbaum Departs Sprint; NFC Veterans from Citi, Orange Join C-SAM [WWWdocument] http://nfctimes.com/news/early-isis-planner-bierbaum-departs-sprint-orangeffnfcveteran-barnaud-leaves-c-sam (accessed 20 February 2015
7. Balaban, D. (2013c). Google Introduces Update To Wallet App; Continues Support for NFC for In-Store Payments [WWW document] http://nfctimes.com/news/googleffintroduces-updateffwallet-app-continues-support-nfc-storepayments (accessed 20 February 2015
8. Balaban, D. (2013d). Special report: Google backs host-card emulation, but Visa and MasterCard could hold keys to success [WWW document] http://nfctimes.com/news/special-report-googleffbacks-host-card-emulation-visa-andmastercard-could-hold-keys-success-0 (accessed 20 February 2015
9. Bass, F.M. (1969). A New Product Growth for Model Consumer Durables, Management Science 15(5): 215-227
10. Bloomberg Business. (2014). Company Overview of HAREX InfoTech Inc. [WWW document] http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=1575217 (accessed 15 January 2014
11. Boudreau, K. (2010). Open Platform Strategies and Innovation: Granting access vs. devolving control, Management Science 56(10): 1849-1872
12. Boudreau, K.J. and Hagiu, A. (2008). Platform Rules: Multi-Sided platforms as regulators, in A. Gawer (ed.) Platforms, Markets and Innovation, London: Edward Elgar, pp. 163-191
13. Bradford, T. and Hayashi, F. (2007). Complex Landscapes: Mobile Payments in Japan, South Korea, and the United States, Payments System Research Briefing. The Federal Reserve Bank of Kansas City, Available at: http://www.kc.frb.org/PUBLICAT/PSR/Briefings/PSR-BriefingSept07.pdf, (accessed 20 February 2015
14. Caillaud, B. and Jullien, B. (2003). Chicken & Egg: Competition among intermediation service Providers, The RAND Journal of Economics 34(2): 309-328
15. Ceccagnoli, M., Forman, C., Huang, P. andWu, D.J. (2012). Cocreation of Value in a Platform Ecosystem: The case of enterprise software, MIS Quarterly 36(1): 263-290
16. Chakravorti, S. and Roson, R. (2006). Platform Competition in Two-SidedMarkets: The case of payment networks, Review of Network Economics 5(1): 118-142
17. Chau, P.Y.K. and Poon, S. (2003). Octopus: An effcash payment system success story, Communications of the ACM 46(9): 129-133
18. CIBC (2014). Quick Facts [WWW document] https://www.cibc.com/ca/insidecibc/quick-facts.html (accessed 15 January 2014
19. Clark, S. (2011). Isis signs up Visa, MasterCard, Discover and Amex for NFC mobile payments [WWW document] http://www.nfcworld.com/2011/07/19/38662/isis-signs-up-visa-mastercard-discover-and-amex-for-nfc-mobilepayments/ (accessed 20 February 2015
20. Clark, S. (2013). Isis NFC mobile wallet goes live across the US [WWW document] http://www.nfcworld.com/2013/11/14/326846/isis-nfc-mobileffwallet-goes-liveacross-us/ (accessed 20 February 2015
21. Cusumano, M.A. and Gawer, A. (2002). The Elements of Platform Leadership, MIT Sloan Management Review 43(3): 51-58
22. Davis, F.D. (1989). Perceived Usefulness, Perceived Ease of Use, and User Acceptance of Information Technology, MIS Quarterly 13(3): 319-340. docomo Newsletter Mobility (2011). DOCOMO enriches mobile NFC ecosystem [WWW document] https://www.nttdocomo.co.jp/english/info/media-center/newsletter/pdf/mobility-doc-34.pdf (accessed 20 February 2015
23. DOrazio, D. (2012). Google Wallet overhauled: support for major credit and debit cards, new remoteffdisable feature [WWW document] http://www.theverge.com/2012/8/1/3213181/googleffwallet-overhauled-credit-debit-card-support (accessed 20 February 2015
24. Economides, N. and Katsamakas, E. (2006). Two-Sided Competition of Proprietary vs. Open Source Technology Platforms and the Implications for the Software Industry, Management Science 52(7): 1057-1071
25. Economides, N. and Tåg, J. (2012). Network Neutrality on the Internet: A two-sided market analysis, Information Economics and Policy 24(2): 91-104
26. Eisenhardt, K.M. (1989). Building Theories from Case Study Research, The Academy of Management Review 14(4): 532-550
27. Eisenmann, T.R. (2008). Managing Proprietary and Shared Platforms, California Management Review 50(4): 31-53
28. Eisenmann, T., Parker, G. and Alstyne, M. (2006). Strategies for Two-Sided Markets, Harvard Business Review 84(10): 92-101
29. Eisenmann, T.R., Parker, G. and Van Alystyne, M. (2009). Opening Platforms: How, when and why? in A. Gawer (ed.) Platforms, Markets and Innovation, Cheltenham, UK and Northampton, MA: Edward Elgar Publishing, pp 131-162
30. Eisenmann, T., Parker, G. and Van Alstyne, M. (2011). Platform Envelopment, Strategic Management Journal 32(12): 1270-1285
31. Evans, D.S. (2002). The antitrust economics of two-sided markets [WWW document] http://dx.doi.org/10.2139/ssrn.332022 (accessed 14 January 2015
32. Evans, D.S. (2003). Some Empirical Aspects of Multi-Sided Platform Industries, Review of Network Economics 2(3): 191-209
33. Evans, D.S. (2009). How Catalysts Ignite: The economics of platform-based start-ups, in A. Gawer (ed.) Platforms, Markets and Innovation, Cheltenham, UK and Northampton, MA: Edward Elgar, pp 99-129
34. Evans, D.S. (2012). Governing Bad Behavior by Users of Multi-Sided Platforms, Berkeley Technology Law Journal 27(2): 1201-1250
35. Evans, D.S., Hagiu, A. and Schmalensee, R. (2006). Invisible Engines, Cambridge, MA: The MIT Press.
36. Evans, D.S. and Schmalensee, R. (2007). The Industrial Organization of Markets with Two-Sided Platforms, Competition Policy Internat 3(1): 151-179
37. Evans, D.S. and Schmalensee, R. (2010). Failure to Launch: Critical mass in platform businesses, Review of Network Economics 9(4): 1-26
38. FierceWireless (2013). Grading the top U.S. wireless carriers in the third quarter of 2013 [WWW document] http://www.fiercewireless.com/special-reports/grading-top-us-carriers-third-quarter-2013 (accessed 20 February 2015
39. Finextra. 2002). Visa and SK Telecom partner for infrared mobile payments [WWW document] http://www.finextra.com/news/fullstory.aspx?newsitemid=5735 (accessed 20 February 2015
40. French, C. (2013). Rogers Comms to launch credit card next year [WWW document] http://www.reuters.com/article/2013/09/06/us-rogers-cardidUSBRE98512V20130906 (accessed 20 February 2015
41. Gabszewicz, J. and Wauthy, X. (2004). Two-sided markets and price competition with multi-homing, CORE Discussion Paper No. 2004030
42. Gary, L. (2004). Is there A Multisided Market in Your Future? Harvard Management Update 9(5): 3-5
43. Gawer, A. (2009). Platforms, Markets and Innovation: An introduction, in A. Gawer (ed.) Platforms, Markets and Innovation, Cheltenham, UK and Northampton, MA: Edward Elgar Publishing, pp 1-16
44. Gawer, A. and Cusumano, M.A. (2002). Platform Leadership, Boston, MA: Harvard Business School Press.
45. Gawer, A. and Henderson, R. (2007). Platform Owner Entry and Innovation in Complementary Markets: Evidence from intel, Journal of Economics & Management Strategy 16(1): 1-34
46. Greenstein, S. (1996). Invisible Hand Versus Invisible Advisors: Coordination mechanisms in economic networks, in E. Noam and A. Nishuilleabhain (eds.
47. Private Networks, Public Objectives, Amsterdam and New York: North-Holland, pp 135-161
48. Hagiu, A. (2006a). Pricing and Commitment by Two-Sided Platforms, The RAND Journal of Economics 37(3): 720-737
49. Hagiu, A. (2006b). Proprietary vs. Open Two-Sided Platforms and Social Efficiency (May). AEI-Brookings Joint Center Working Paper No. 06-12; Harvard Business School Strategy Unit Working Paper No. 09-113. Available at: http://ssrn.com/abstract=980755; http://dx.doi.org/10.2139/ssrn.980755
50. Hagiu, A. and Wright, J. (2014). Multi-Sided Platforms. Working Paper 12-024, Harvard Business School, November, 2014. Available at: http://www.hbs.edu/faculty/Publication%20Files/15-037-4d9f8cf9-28b6-482eff9c18-0422d4553c8e. pdf (accessed 20 February 2015
51. Hanseth, O. and Lyytinen, K. (2010). Design Theory for Dynamic Complexity in Information Infrastructures: The case of building internet, Journal of Information Technology 25(1): 1-19
52. Jullien, B. (2008). Price Skewness and Competition in Multi-Sided Markets, IDEI Working Paper No. 504. Available at: http://neeo.univ-tlse1.fr/402/1/priceffskewness.pdf.
53. Kellex (2012). Samsung and Apple Device Sales Figures Outed in Court, Surprise at the Top for Samsung [WWW document] http://www.droid-life.com/2012/08/10/samsung-and-appleffdeviceffsales-figures-outed-in-court/ (accessed 20 February 2015
54. Kelly, S.M. (2013). Google Wallet Update for Android Removes NFC Requirement [WWW document] http://mashable.com/2013/09/17/googleffwallet-nfc-update/ (accessed 20 February 2015
55. Kharif, O. (2011). AT& T-Verizon-T Mobile Sets $100 Million for Google Fight: Tech [WWW document] http://www.bloomberg.com/news/articles/2011-08-29/at-t-verizon-t-mobileffsets-100-million-for-googlefffight-tech (accessed 20 February 2015
56. Kiladze, T. and Trichur, R. (2013). Rogers to take on banks in mobile wallet wars [WWW document] http://www.theglobeandmail.com/report-on-business/rogersto-takeffon-banks-in-wallet-wars/article15303570/ (accessed 20 February 2015
57. King, R. (2011). Isis mobile payment system changes direction [WWW document] http://www.zdnet.com/article/isis-mobileffpayment-system-changes-direction/ (accessed 20 February 2015
58. Kuittienen, T. (2012). Text Messaging - Drivers of the Deterioration [WWW document] http://www.forbes.com/sites/terokuittinen/2012/01/03/textmessaging-drivers-of-theffdeterioration/ (accessed 20 February 2015
59. Leavitt, L. (2011). Polyamorous Google Wallet adds Visa to its arsenal [WWW document] http://www.engadget.com/2011/09/20/polyamorous-googleffwalletadds-visa-to-its-arsenal/ (accessed 20 February 2015
60. Mahajan, V., Muller, E. and Bass, F.M. (1990). New Product Diffusion Models in Marketing: A review and directions for research, Journal of Marketing 54(1): 1-26
61. Markus, M.L. (1987). Toward a Critical Mass Theory of Interactive Media: Universal access, interdependence and diffusion, Communication Research 14(5): 491-511
62. Mas, I. and Rotman, S. (2008). Going Cashless at the Point of Sale: Hits and Misses in Developed Countries. Focus Note 51. Washington , DC: CGAP. Available at: http://www.cgap.org/sites/default/files/CGAP-Focus-NoteffGoing-Cashless-attheffPoint-of%20SaleffHits-and-Misses-in-Developed-Countries-Sep-2008.pdf (accessed 20 February 2015
63. Mashable (2014). Google Wallet [WWW document] http://mashable.com/category/googleffwallet/ (accessed 15 January 2014
64. Mndez-Wilson, D. (2002). Top five U.S. carriers now offer SMS interoperability, Wireless Week 8 April.
65. Mobile Payments World. (2002). Visa, SKT launch Korean EMV and Infrared payment system [WWW document] http://www.mobilepaymentsworld.com/visa-skt-launch-korean-emv-and-infrared-payment-system/ (accessed 20 February 2015
66. Ondrus, J., Lyytinen, K. and Pigneur, Y. (2009). Why mobile payments fail?Towards a dynamic and multi-perspective explanation, in 42th Hawaii International Conference on System Sciences (HICSS09) (Big Island, HI, 5-8 January); Big Island, HI: IEEE Computer Society. 1-10
67. Ondrus, J. and Pigneur, Y. (2009). Near Field Communication: An assessment for future payment systems, Information Systems and effBusiness Management 7(3): 347-361
68. Ozcan, P. and Santos, F.M. (2014). The Market that Never Was: Turf wars and failed alliances in mobile payments, Strategic Management Journal, advance online publication 19 May, doi: 10.1002/smj.2292
69. Parker, G. and Van Alstyne, M.W. (2005). Two-Sided Network Effects: A theory of information product design, Management Science 51(10): 1494-1504
70. Parker, G. and Van Alstyne, M.W. (2010). Innovation, openness & platform control, in Proceedings of the 11th ACM Conference on Electronic Commerce (Cambridge, MA, 7-11 June); New York: Association for Computer Machinery. 95-96
71. Parker, G. and Van Alstyne, M.W. (2013). Innovation, openness, and platform control [WWW document] http://dx.doi.org/10.2139/ssrn.1079712 (accessed 3 June 2014
72. Pousttchi, K. (2008). AModeling Approach and Reference Models for the Analysis of Mobile Payment Use Cases, Electronic Commerce Research and Applications 7(2): 182-201
73. Pymnts (2011). Exclusive Interview with ISIS: Wheres It Going and Whats the Vision [WWW document] http://www.pymnts.com/uncategorized/2011/exclusiveffinterview-with-isis-whereffs-it-going-and-what-s-theffvision/#. VOdTaEIrzq8 (accessed 20 February 2015
74. Reed, B. (2013). Carriers finally unveil Isis mobile wallet now that no one cares about mobile wallets [WWW document] http://bgr.com/2013/11/14/isismobileffwallet-releaseffdate/ (accessed 20 February 2015
75. Rochet, J.-C. and Tirole, J. (2003). Platform Competition in Two-Sided Markets, Journal of the European Economic Association 1(4): 990-1029
76. Rochet, J.-C. and Tirole, J. (2004). Two-Sided Markets: An Overview, mimeo, IDEI University of Toulouse
77. Rogers, E.M. (2003). Diffusion of Innovations, 5th edn New York: Free Press.
78. Rogers (2012). Rogers Wireless [WWW document]
79. Roson, R. (2005). Two-Sided Markets: A tentative survey, Review of Network Economics 4(2): 142-160
80. Rysman, M. (2009). The Economics of Two-Sided Markets, Journal of Economic Perspectives 23(3): 125-143
81. Sarker, S. and Lee, A.S. (2002). Using A Positivist Case Research Methodology to Test Three Competing Theories-in-Use of Business Process Redesign, Journal of the Association for Information Systems 2(1): 237-252
82. Shapiro, C. and Varian, H.R. (1998). Information Rules: A strategic guide to the network economy, Boston, MA: Harvard Business School Press.
83. Sharp, A. and French, C. (2012). UPDATE 1-CIBC, Rogers announce Canada's first mobile wallet [WWW document] http://www.reuters.com/article/2012/05/15/canada-mobilepayments-idUSL1E8GEI6220120515 (accessed 20 February 2015
84. Shin, B. and Lee, H.G. (2005). Ubiquitous Computing-Driven Business Models: A case of SK Telecoms financial services, Electronic Markets 15(1): 4-12
85. Sidel, R. and Raice, S. (2011). Pay-by-Phone Dialed Back [WWW document] http://www.wsj.com/news/articles/SB100014240527487047406045763014824-70575092 (accessed 20 February 2015
86. Softcard (2013). Isis® Announces National Rollout Later This Year [WWW document] https://news.gosoftcard.com/2013/07/30/isisnationalrollout/ (accessed 20 February 2015
87. Sprint Newsroom (2012). Sprint Nextel Reports Fourth Quarter and Full Year 2011 Results [WWW document] http://newsroom.sprint.com/news-releases/sprint-nextel-reports-fourth-quarter-and-full-year-2011-results.htm (accessed 20 February 2015
88. TCA. (2013). Number of subscribers by Carriers (as of Jun 30, 2013) [WWW document] http://www.tca.or.jp/english/database/2013/06/index.html (accessed 20 February 2015
89. Techopedia (2014). Google Wallet [WWW document] http://www.techopedia.com/definition/27518/googleffwallet (accessed 15 January 2014
90. The World Bank (2014). Automated teller machines (ATMs) (per 100, 000 adults) [WWW document] http://data.worldbank.org/indicator/FB.ATM.TOTL.P5 (accessed 20 February 2015
91. Thomas, S. (2013). Why Sprint Doesn't Put Money on Isis [WWW document] http://www.lightreading.com/mobile/services-apps-mobile/why-sprint-doesntput-money-on-isis/d/d-id/706478 (accessed 20 February 2015
92. Tiwana, A., Konsynski, B. and Bush, A.A. (2010). Research Commentary -Platform Evolution: Coevolution of platform architecture, governance, and environmental dynamics, Information Systems Research 21(4): 675-687
93. United States Census Bureau (2009). Annual Estimates of the Resident Population by Sex and Selected Age Groups for the United States: April 1, 2000 to July 1, 2009 [WWW document] http://www.census.gov/popest/data/national/asrh/2009/tables/NC-EST2009-02.xls (accessed 20 February 2015
94. Venkatesh, V., Morris, M.G., Davis, G.B. and Davis, F.D. (2003). User Acceptance of Information Technology: Toward a unified view, MIS Quarterly 27(3): 425-478
95. von Behren, R and Wall, J. (2011). Coming soon: make your phone your wallet [WWW document] http://googleblog.blogspot.com/2011/05/coming-soonmakeffyour-phoneffyour-wallet.html (accessed 20 February 2015
96. Welch, C. (2013). Carrier-backed Isis mobile payment system rolls out nationwide [WWW document] http://www.theverge.com/2013/11/14/5103592/isis-mobilewallet-rolls-out-nationwide (accessed 20 February 2015
97. West, J. (2003). How Open is Open Enough?: Melding proprietary and open source platform strategies, Research Policy 32(7): 1259-1285
98. Weyl, E.G. (2010). A Price Theory of Multi-Sided Platforms, American Economic Review 100(4): 1642-1672
99. Wong, S. (2013). Why BlackBerry's expanding BBM to iOS, Android is smart - and hazardous [WWW document] http://www.usatoday.com/story/tech/2013/05/17/blackberry-bbm-ios-android/2194311/ (accessed 15 February 2015
100. Wright, J. (2004). OneffSided Logic in Two-Sided Markets, Review of Network Economics 3(1): 44-64
101. Yin, S. (2011). Why Sprint Chose GoogleWallet Over Isis [WWW document] http://www.pcmag.com/article2/0, 2817, 2385986, 00.asp (accessed 20 February 2015
102. Yin, R.K. (2013). Case Study Research: Design and Methods. Vol. 5 Thousand Oaks, CA: Sage.