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How Shopping Platforms Play a Role in the Credit Card Industry

Author

Listed:
  • Sipeng Zeng

    (Shanghai Jiao Tong University, 800 Dongchuan Road, Minhang District, Shanghai, 200240, China)

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.

Suggested Citation

  • Sipeng Zeng, 2024. "How Shopping Platforms Play a Role in the Credit Card Industry," Financial Economics Letters, Anser Press, vol. 3(2), pages 16-25, June.
    • Handle: RePEc:bba:j00007:v:3:y:2024:i:2:p:16-25:d:317
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    References listed on IDEAS

    as
    1. Bruno Albuquerque, 2019. "Household heterogeneity and consumption dynamics in the presence of borrowing and liquidity constraints," Applied Economics Letters, Taylor & Francis Journals, vol. 26(6), pages 454-459, March.
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