How Shopping Platforms Play a Role in the Credit Card Industry

Sipeng Zeng
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Sipeng Zeng: Shanghai Jiao Tong University, 800 Dongchuan Road, Minhang District, Shanghai, 200240, China

Financial Economics Letters, 2024, vol. 3, issue 2, 16-25

Abstract: We develop a four-party model involving banks, merchants, consumers, and platform firms to explain why large shopping malls can offer interest-free installment services to consumers. Using a collaboration between an online shopping platform firm and multiple banks to issue co-branded credit cards as a natural experiment, we find that consumers’ spending on the platform fulfills the requirements for merchants and banks to choose a four-way model. This study highlights the pivotal role of platform firms in the credit card market.

Keywords: Credit card; Platform enterprise; Interest-free installment; Consumption (search for similar items in EconPapers)
Date: 2024
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