An Analysis of Digital Payment Impact on Commercial Bank Performance

This report delves into the effects of digital payments on commercial bank performance, examining the development of digital payment systems and their relationship with third-party payment providers. It explores the positive and negative influences, including cooperation, competition, and coopetition, within the financial sector. The report reviews prior studies, identifies research gaps, and outlines theoretical foundations such as financial intermediary and technology spillover theories. It analyzes the impact of digital payments on bank efficiency, profitability, and strategic decision-making, providing a comprehensive overview of the evolving financial landscape and its implications for commercial banks. The study also highlights the innovations in the digital payment landscape and its impact on the banking sector.

Acknowledgments

Abstract

Table of Contents
1 Introduction..................................................................................................5
1.1 Background and Research Motivations..............................................5
1.2 Research Questions............................................................................5
1.3 Research aim and Objectives.............................................................5
1.4 Outline of the Research......................................................................5
2 Literature Review..............................................................................................5
2.1 Introduction............................................................................................5
2.2 Digital Payment and Bank’s performance......................................................5
2.2.1 The Development of Digital Payment..................................................5
2.2.2 The Relationship Between Third-Party Payment and Commercial Bank form
Positive and Negative Influence Mechanism......................................................6
2.3 Prior study and research gap.......................................................................7
2.4 Theoretical foundation............................................................................10
2.4.2 Financial Intermediary Theory-Financial disintermediation theory............10
2.4.3 Technology spillover theory............................................................11
2.5 Theoretical Framework...........................................................................11
2.6 Contributions........................................................................................15
3 References.....................................................................................................20

1 Introduction
1.1 Background and Research Motivations
1.2 Research Questions
1.3 Research aim and Objectives
1.4 Outline of the Research
2 Literature Review
2.1 Introduction
At first, this chapter takes a look at the current state of digital payment and
this leads naturally to third-party online payment. Then, the project introduces
the relationship between the third-party payment services market and
commercial bank from a literature review perspective. Next, combined with
the prior studies, the author makes an evaluation and comparative analysis
and finally gains some inspiration from that relevant literature. Not only that,
but the author also summarizes the research gap and makes some
assumptions based on previous study and research questions. Finally, the
study gives the innovation points and contributions to this paper.
2.2 Digital Payment and Bank’s performance
2.2.1 The Development of Digital Payment
Digital payment could be defined as the payment which is made with the help
of digital modes such as mobile applications. In order to use it, it is very
important for both the parties involved in the transaction should have digital
modes. These parties are payer and receiver. The development of internet
finance is different from that of Fintech finance outside various countries.
Represented by the developed countries, the United States have sufficient
traditional financial supplies, and the needs of public could be satisfied offline
(Patil, Rana and Dwivedi, 2018). However, most of the countries around the
world are still in the early stages of financial development while the case of
insufficient financial infrastructure and financial markets. It obviously exists a

big gap with developed countries. This gap is gradually being filled due to the
emergence of internet finance. Internet finance provides strong technical
support for electronic payment system.
Tandulwadikar (2015) proposes that digital payment as an instant convenient
and convenient way includes desktop payment, mobile payment, and digital
wallets which means no hard cash (current notes). The digital payment as an
electronic payment has become a necessary daily way which means payer
and payee both use digital modes to send and receive money(O’Leary et al.,
2003). There is a large numbers of well-known third-party payment companies
cover the whole world such as the United Kingdom Worldpay (1993), the
United States PayPal (1998), China Alipay (2004), Germany Giropay (2006),
Apple pay (2014) and Google pay (2018). As Manning (2015) investigates
that the business of banks may face challenges due to the expansion of third-
party digital payment companies because third-party payment providers such
as PayPal, and Google in the United States are establishing direct
relationships with customers over convenience. In this way, they attract some
young customers in a short time to seize the opportunity of the mobile market
and engage in the mobile payment gateway. Driven by globalization, the
demand of cross-border good are increasing. People in their home country
pay more attention to the online shopping rather than offline shopping which
means there are high potential for the third-party mobile payment
development in the cross-border transactions. As the figure 1 shows that there
is a stable increase trend in the scale of third -party online payment in China
recently.
Figure 1: The scale of third-party industrial payment transactions in China

The above chart is focused with analysis of scale of the third-party
payment transaction in China from year 2013 to 2022. According to the chart
the payments in year 2013 were very less but with passing of time the
payments were increased. The estimated data for year 2020 was more than
80% and it has been forecasted that till 2022 it will be increased more than
100%. It shows that with the time the third-party payment scale is developing
in China with the time. Additionally, the next topic which will be covered for the
completion of the dissertation will relate to banks from positive and negative
influence mechanism which will help to enhance the knownedge about
relationship between commercial and third party payment.
2.2.2 The Relationship Between Third-Party Payment and Commercial
Bank form Positive and Negative Influence Mechanism
The rapid development of Internet payment, especially the explosive
development of third-party payment and the rise of mobile payment, it has
become an issue of great concern in many countries because it involves part
of the business of commercial banks (DeYoung et al., 2007). It means third-
party payment companies has entered the bank activities and it accounted for
a large operational productivity in the payment field. It can be from the picture
that there is more in line when the third-party payment companies entered.
This dissertation research on the relationship between third-party payment
and commercial banks’ performance. Therefore, it is necessary to figure out
the relationship between the third-party and commercial bank. It mainly
focuses on cooperation, competition and cooperative competition (Frost and
et.al., 2018). All of them lay the foundation for the following research
(Hryckiewicz, Kryg and Tsomocos, 2020).
Cooperation
The emergence of third-party payment is an extension and supplement to the
payment service function of commercial banks, showing a cooperative
relationship with banks (Bank for International Settlements, 2003).
Commercial banks provide technical interfaces and settlement services for
third-party payments to share the profit with third-party payment companies. It
involves cooperating in payment gateway, fast payment, withholding payment
and POS trade system (Kokkola, 2010).
According to the conclusions from empirical analysis from (Zhou et al., 2008),
there is no doubt that cooperation would be increasingly in-depth for
commercial banks in China. The positive impact of third-party payment on the
operating efficiency of commercial banks mainly highlights in increasing the

banking website users and reduce operating costs.
Competition
The third-party payment institutions and commercial banks are both exists the
business overlap and conflicting views. Therefore, it would inevitably lead to
fierce competition. When users use a third-party payment platform for online
transactions, they firsthand over funds to the third-party payment platform.
The third-party payment platform waits until the buyer confirms the receipt of
the goods before lending to the seller. This process actually constitutes a
settlement business. From the perspective of the development of banks, the
era of relying on deposit-loan spreads for profit is about to pass soon, and
non-asset business will be an important source of profits for banks in the
future. While, third-party institutions directly provide the same services as
banks at lower rates, which has obviously grabbed intermediate businesses of
banks(Hu, 2016). The negative impact of third-party payment on the operating
efficiency of commercial banks mainly focuses on increasing business
competition.
Coopetition
Through theoretical mathematical model, there are an evolutionary stable
strategy (ESS) which shows that cooperation and competition is bound to be
increasingly in-depth and expansive for commercial banks as well as e-
commerce financial institutions in China (Zhao et al., 2015). Furthermore, the
complementarity of participants’ core competitiveness is explored as the root
of cooperation. There is no doubt that e-commerce financial institutions and
commercial banks have their unique advantage and core competitiveness.
For instance, e-commerce financial institutions are low-cost e-commerce
customer credit evaluation capability on big data. On the other hand,
commercial banks are abundant in capital strength.
The positive and negative effects of third-party payment on commercial banks
exist at the same time. In reality, banks perform differently when facing the
impact of third-party payment due to various reasons. Therefore, this
dissertation attempts to conduct quantitative research by establishing an
empirical model in the following pages.
2.3 Prior study and research gap
As indicated in a number of studies (Schierz et al., 2010; Bezhovski, 2016;
Teoh et al., 2013; Schierz et al., 2010) literature on electronic payment
between 2010 and 2019 has been dominated by two main topics: technology

innovation and consumer satisfaction. Main aim of the dissertation is to
explore the relationship between the third-party online payment and
commercial bank’s performance r this purpose different theories from various
areas, such as economics, marketing or business ecosystems are used (Xia
and Chunsom, 2018; Liao, 2018). Surveys such as that conducted by Dinh et
al. (2015) have shown that Internet banking could increase the profitability of
commercial banks based on Vietnam. The random effect model and fixed
effect model are used to estimate the relationships between them. One of the
limitations with this explanation is that sample size may not be sufficient.
Secondly, Lao and Jiang (2009) combined with PEST model to describe risk
analysis of third-party online payment and found that there are many
advantages and its own shortcomings at the same time. Take the Alipay as
the example, it would promote the development of ecommerce and play
different roles with banks, consumer and other payment companies because
they are dispensable. In the meanwhile, they are also defined the B2C and
C2C as the mainly popular areas in third party payment. While, commercial
banks have not placed online payments part of their foremost business
portfolio and source of income as well. This allows for the third-party online
payment to help with cash flow and also fills the vacancy instantly. However,
this method of analysis has a number of limitations such as the Alipay case
analysis is not universal to the whole third-party payment’s companies.
Furthermore, Zhao and Sun (2012) argue that the main risk is financial risk
such as cash, credit, operational risk and so on which is not mentioned by Lao
and Jiang.
Thirdly, Gulati and Kumar (2017) first use developed two-stage network (DEA)
model to obtain overall bank operating efficiency. Then through applying a
bootstrapped truncated regression algorithm to explore the determinants of
operating efficiency. The author found that the main reason for the overall
inefficiency of the Indian banking industry is low operating efficiency. The
reasons for efficiency differences could be explained by bank scale, liquidity
position, and targeted loans cost, while the variations in profitability and
income. The research results showed that the banking industry could achieve
higher bank efficiency by improving the bank’s resource utilization and income
generation capabilities.
Finally, the emerging method of transaction through third-party platform bring
great attention to its impact on traditional bank sector. Bai (2019) compares
the comparative competitive advantages of commercial Banks and third-party
payment platforms, and further explored the possible influences and ways of
third-party payment on banks' traditional deposit, loan and remittance
business, consulting business, deposit structure and loan market. Combined
with data and cases, it uses panel regression model to explore the impact of

third-party payment on commercial banks. The result shows that the
expansion of third-party payment will have a positive impact on the profitability
of commercial banks’ asset business, and negatively affect the profitability of
commercial banks’ liability and intermediary businesses. It means third-party
payment would promote the innovation and transformation of commercial
banks. Finally, there are some corresponding policy recommendations for the
development of commercial banks in the new situation. The explained
variables are the three business indicators of commercial banks, and the
explanatory variables are the third-party payment scale indicators This
method and third-party payment variables are also used in this dissertation.
Through combing and reviewing related literature, it can be found that there
are plenty of research results focusing on the relationship between the
Internet finance field and the operating efficiency of commercial banks. There
are quite a few scholars focuses the specific field about the relationship
between third-party payment and commercial bank performance.
Furthermore, regarding the degree of impact on the operating efficiency of
commercial banks, most of the research focuses on profitability, and there are
quite a few studies on other operating principles of banks. At the same time,
there are some scholars studying the influence of commercial banks on
Internet finance which are basically qualitative research around theoretical
analysis, or on Internet finance as a whole to construct an Internet finance
index. Most research results insist the views is that in the initial growth stage
of Internet finance, it has fierce competition and squeeze on commercial
banks, which is mainly a negative restraint. However, commercial banks have
also accepted the spirit of openness and collaboration on the Internet
recently, which are more functional complementarity and cooperation to
achieve mutual benefit and win-win results. The development of third-party
payment, the society pays a larger amount of attention to it. Therefore, it is
necessary to conduct a special research from the perspective of third-party
payment from quantitative analysis to find the relationship between them.
Table1. Article included in systematic literature review
Authors Country Context Method Study
Measures Results

Yang and
Liang
(2018)
China
The impact
of third-
party
payment
on
commercia
l banks
Qualitative
analysis;
Take the
Alipay as
the
example
Payment
operating
model
Opportuniti
es and
challenges
in the
third-party
payment
and
commercia
l banks.

Bai (2019) China
The impact
of third-
party
payment
on
commercia
l banks
Qualitative
analysis
and
Quantitativ
e analysis；
A-share
commercia
l bank
listed
companies
from 2013
to 2018
Panel
regression
model
If the third-
party
payment
will be
expanded
then it will
result
positively
as well as
negatively.
The
positive
outcome of
it will be
the
increment
in
profitability
of
commercia
l banks’
asset
business,
The
negative
impact will
be the
negative
affect upon
the
profitability
of
commercia
l banks’
liability and
intermedia
ry
businesses

Xia and
Chunsom
(2018)
China
Third-Party
Payments
Impact on
Commercia
l Banks’
Non-
Interest
Income
Quantitativ
e analysis;
Panel data,
pooled
model,
fixed
effects
model, and
the random
effects
model
Due to the
internet
finance the
interest
income on
loans is
decreased
for the
commercia
l banks.
Apart from
this, it has
increased
the interest
cost of
deposits,
lowered
the growth
rate of
loans and
deposit.
Dinh et al.
(2015) Vietnam
The impact
of internet
banking to
performanc
e
Quantitativ
e analysis;
Random
effect
model
(REM) and
fixed effect
model
(FEM)
profitability
ratios
(ROA,
ROE),
noninterest
operating
expenses
and
incomes;
20
commercia
l banks
from 2009-
2014
Internet
banking
has the
positive
impact of
non-
interest
incomes
and
thereby
increasing
the
profitability
of
commercia
l banks

Lao and
Jiang
(2009)
China Third-party
payment
Qualitative
analysis;
Take the
Alipay as
the
example
PEST
model
The risk of
third-party
payment
mainly
from macro
environme
nt
Gulati and
Kumar
(2017)
India
Banks'
intermediat
ion and
operating
efficiencies
Quantitativ
e analysis;
Representa
tive banks
from 2011
to 2013
Two-stage
NDEA
model and
Bootstrapp
ed
truncated
regression
The
operating
inefficiency
is the
dominant
source of
overall
bank
inefficiency
in Indian
banking
sector.
Chen et al.
(2019) China
Internet
Finance
and the
profitability
of
commercia
l bank
Quantitativ
e analysis;
200
Chinese
commercia
l banks
from 2011
to 2016.
Fixed-
effects
model
Third-party
payments
are leaving
negative
impact
upon the
commercia
l banks
because
they are
affecting
the
profitability
of banks.

Tran et al.
(2016) US
Liquidity
creation,
regulatory
capital,
and bank
profitability
of US
banks
Quantitativ
e analysis;
all U.S.
banks from
1996 to
2013
Panel data;
Vector
autoregres
sive model
(VAR)
Regulatory
capital is
negatively
related to
bank
profitability
for higher
capitalized
banks but
positively
related to
profitability
for lower
capitalized
banks,
liquidity is
opposite.
Hou et al.
(2016) China
Internet
finance
developme
nt and
banking
market
discipline
Quantitativ
e analysis;
56
commercia
l banks
from 2003
to 2014
Panel
models
Bank risk
are
negatively
associated
with the
growth of
deposit
volumes.
DeYoung et
al. (2007) US
Deregulati
on and
technologic
al change
about
commercia
l banks
Qualitative
analysis;
Take the
Alipay as
the
example
Geographic
deregulatio
n model
Internet
has the
potential to
add value
for both
large
banks and
small
banks and
so on.
2.4 Theoretical foundation
In order to understand the third-party payments, commercial bank’s
performance and activities different theories will be discussed in this section.
These are Long tail theory, financial intermediaries’ theory and technology
spillover theory. The discussion of all of them is as follows:

2.4.1 Long tail theory
Long tail theory could be defined as the strategy that allows business to
realise the significant profits by performing by selling very low volume of such
items that are hard to find by the customers rather than selling such products
that are easily available in the market. When it is used for the purpose of
distribution then different factors are focused which are random number,
popularities nad probability. As mentioned by Ghose and Gu (2006), the
electric market could be analyzed by long tail theory and finds that the wise
company should pay more attention to the profits to be made from the long
tail. It cannot profitably be offered through brick-and-mortar channels. For
third-party payment platforms, information technology has enabled the
expansion of service data channels and significantly reduced transaction
costs (Yang and Liang, 2018). It means the small transactions with small
profits that were previously underestimated can be completed easily and
quickly. As the number of transactions and transaction frequency increase, a
large number of small and even ignored demand can also converge into a
large market that can compete with the original mainstream market and obtain
considerable profits. As the tail becomes longer and thicker, the head of the
curve becomes narrower. This dynamic process of increasing the tail is the
process of exerting the benefits of the long tail. Most of the researches
examine online industries, concentrate in consumer products and the
industries’ market performance. Liang (2017) found that Internet finance had a
positive impact on banks based on the economic long tail theory, but Internet
finance had a decentralized effect on the bank's credit center system and had
a negative impact on banks. From an empirical point of view, the calculation
of the design model illustrates the impact of third-party Internet mobile
payment on the profitability, growth, and scale of deposits and loans of
commercial banks.
2.4.2 Financial Intermediary Theory-Financial disintermediation theory
Financial intermediary theory which is one of the traditional intermediation
theories which is based upon the transaction costs and the information which
is asymmetric in nature. It is mainly used for the purpose of accounting the
institutions which take deposits or offer insurance policies to the clients. First
of all, commercial banks are typical financial intermediaries. Compared with
individual investors, commercial banks have inherent advantages in terms of
status, channels, and technology. Commercial banks can master sufficient
and accurate information, and to a large extent solve the problem of
information asymmetry problems and improve the allocation of resources in
the financial market. Secondly, with the advantage of economies of scale,

commercial banks can share costs as intermediaries and conduct financing at
lower prices. At the same time, commercial banks may create new products
and increase the choice for customers in the process of reducing costs. Then,
commercial banks, as financial intermediaries, can also diversify the allocation
of personal assets, and can control the level of exposure risks while ensuring
returns, reducing friction in the transaction process. Therefore, commercial
banks can enhance the value of financial intermediary functions based on
enhancing information and data analysis capabilities, reducing operating
costs, achieving business diversification, and improving risk management
levels, and ultimately achieve an increase in operating efficiency.
However, Gong (2013) defined the meaning of the Internet finance model,
introduced its functions and characteristics, and analyzed the pressure on the
profitability of commercial banks caused by financial disintermediation caused
by Internet finance that is different from traditional financial institutions. The
analysis results show that commercial banks should not be short-sighted. If
they want to achieve long-term sustainable development, they should learn
and use the Internet financial model, and improve the traditional business
model and profit method.
2.4.3 Technology spillover theory
Technology spill over theory could be defied as the approach which is focused
with the process that is used by the investor to learn from the research
outcomes of other. The information recorded in earlier completed research
projects is used by them so that they can learn from theoretical knowledge
and make a new invention. Technology spillover effect refers to the fact that
recipients of technological innovation achievements are due to the top
technology of advanced enterprises in related industries (Liu and et.al., 2016).
The effects of diffusion mainly include demonstration effects and competitive
effects. There are some factors such as reservoir host, pathogen exposure
and the within-human factors etc. that are associated with the spillover effect
and effected in the web -mobile payment extension behavior (Zhang et al.,
2019). Apart from this, third-party payment is ahead of commercial banks in
terms of function and technology. Due to the existence of demonstration
effects, commercial banks can upgrade their products through technology
dissemination and learning and imitation, which can enhance their own
technical level, improve service concepts, and improve operating efficiency.
Third-party payment occupies the market for commercial banks’ business,
resulting in fierce competition, which is more likely to cause more business
impacts in the future. In order to consolidate their market position, commercial
banks will inevitably carry out technical and business strategy improvements.
The competition of third-party payment ultimately drives the improvement of

commercial banks' own operating efficiency. In general, both the
demonstration effect and the competitive effect have released the potential for
commercial banks to increase their operating efficiency.
2.5 Framework the theoretical knowledge
A framework combining all factors that influence commercial banks’
performance and the general scale of the third-party payment, is still
incomplete. To fill this gap, this dissertation aims to develop a comprehensive
framework that incorporates the most four types of factors as an explanatory
variables of bank performance and propose four hypotheses applying three
guiding theories.
Profitability Index and Macro Factors
Abreu and Mendes (2001) investigate the determinants of bank interest
margin and profitability under the explanation of a series of bank
characteristics, macroeconomic and regulatory indicators. The aim of the
project is to examine whether the banks from these European countries share
the same interest margin and profitability determinants. Then, the study
evaluates inflation, exchange rates, GDP growth rate, bank size and
capitalization that could be accepted as explanatory variables for interest
margins and profitability. Besides, the return on assets (ROA) and return on
equity (ROE) are concerned in the profitability determinants. Furthermore, as
studied by Xia and Chunsom (2018), the bank size ,net interest margin, loan-
deposit ratio and overhead ratio are identified as the determinants of non-
interest income of commercial banks.. Furthermore, Chen et al. (2019) found
that internet finance possesses a negative relationship with commercial banks
‘performance. Thus, this study based on the long tail and spill over theories
for the existence of the preempting business between third-party payment and
commercial bank by proposing hypothesis H1:
H1: Third-party online payment has significantly negative impact on
profitability of commercial banks’ performance in China.
Liquidity Index
There are some variables to measure the listed companies’ performance that
is loan deposit ratio （LDR（,liquidity ratios （LR（,total assets turnover （TAT（
(Putri, 2013). Tran et al. ( 2016) find that capital is negatively related to bank
profitability （ and the US banks that create more liquidity have lower
profitability. This line of reasoning yields hypothesis H2:

H2: Third-party online payment has significantly negative impact on liquidity of
commercial banks’ performance in China.
Safety Index
Following Chen et al. (2019), it uses the scale of peer-to- peer (P2P) lending
and third-party payment to explain the internet finance. Then, it consists of six
variables: return on average assets (ROA), the proportion of interest income
on loans (ININ), the proportion of interest expense in deposits (INEXP), the
growth rate of loans (GRLA), the growth rate of deposits (GRDE), and bank
risk (NPLR) to explain the banks’ performance. Therefore, the H4 has been
proposed in this dissertation. This leads to the H3:
H3: Third-party online payment has significantly negative impact on safety of
commercial banks’ performance in China.
Growth Index
Growth rates are utilized by investors to assess a firm's growth periodically
and make predictions about future performance. Hou et al. (2016) use data on
56 commercial banks in China in 2003–2014 in a dynamic panel model and
demonstrate that the development of internet finance, in terms of deposit
growth, weakened its positive relationship with bank capitalization but
strengthened its negative relationship with the bank’s risky assets. Combined
theories and literature, it expresses this hypothesis in H4:
H4: Third-party online payment has a negative impact on growth of
commercial banks’ performance in China.
Conceptual Framework and Hypothesis
From the review of the literature, the return on assets (ROA) and return on
equity (ROE) are the main performance indicators in commercial banks.
Combined with other performance index, this study concludes four type of
variables to evaluate the bank performance based on these papers’ limitation
and innovation which respectively are profitability, liquidity, safety and growth
index. As the below figure 1 shows that the determinants of bank performance
are return on assets （ ROA （ , return on equity （ ROE （ ,operating profit
ratio （ OPR （ , non- interest Income Ratio （ NIIR （ , loan deposit
ratio（LDR（,liquidity ratios（LR（,total assets turnover（TAT（,non-performing
loan ratio （ NPLR （ ,NPL provisioning coverage Ratio （ NPLPC （ ,capital
adequacy ratio （ CAR （ ,debt to assets ratio （ DAR （ ,total assets growth
rate（TAGR（,growth rate of net assets per share（NAPGR（,net profit growth

rate（NPGR（and revenue growth rate（RGR（.
Fig. 1: Schematic Diagram Using Independent and Dependent Variables and
Consumptions
Therefore, research sub-questions and hypotheses are given as follows:
Question 1: Does third-party online payment have an impact on profitability of
commercial banks’ performance in China? How is the level of that impact?
Hypothesis H1: Third-party online payment has significantly negative impact
on profitability of commercial banks’ performance in China.
Question 2: Does Third-party online payment have an impact on liquidity of
commercial banks’ performance in China? How is the level of that impact?
Hypothesis H2: Third-party online payment has significantly negative impact
on liquidity of commercial banks’ performance in China.
Question 3: Does third-party online payment have an impact on safety of
commercial banks’ performance in China? How is the level of that impact?
Hypothesis H3: Third-party online payment has significantly negative impact
on safety of commercial banks’ performance in China.
Question 4: Does third-party online payment have an impact on growth of

commercial banks’ performance in China? How is the level of that impact?
Hypothesis H4: Third-party online payment has significantly negative impact
on growth of commercial banks’ performance in China.
2.6 Contributions
The development of third-party payment is forcing the upgrading of banking
business and service transformation. This dissertation explores the
relationship between the development of third-party payment and commercial
banking business on the basis of related theories and analyzes the possible
ways that third-party payment affects the operating performance of
commercial banks. In the empirical aspect, an indicator system is set to
compare the profitability, liquidity, safety and growth ability of commercial
banks, and the influence of third-party payment modes on various aspects of
commercial banks is systematically analyzed. This article puts forward
corresponding countermeasures and suggestions to commercial banks, which
will help commercial banks realize their own business defects and the threats
caused by third-party payment, so that commercial banks can improve their
own business methods on the basis of fully understanding third-party
payment. It means that third-party payment and even Internet finance
technology, customers, data resources and innovative product types could be
actively utilized. Through improved and upgraded service methods, it would
help commercial banks to maintain their traditional business and stabilize their
position while improving overall operating performance. The discussion part
has a certain theoretical and practical significance for the win-win cooperation
between commercial banks and third-party payment. Meanwhile, it also leads
to healthy development of financial markets including third-party payment
platforms and commercial banks.
2.7 Conclusion
The research framework, theoretical basis and empirical methods of
worldwide scholars have certain reference value for this dissertation. Third-
party payment is at the core of the Internet financial model, channel and
platform. This article aims to study the impact of third-party payment on the
operating efficiency of different types of commercial banks in terms of
profitability, liquidity, safety and growth, and strive to make the article more
complete and more realistic. The next chapter of the dissertation will be
focused with methodology. It will be focused with collection of data and
analysis of the same with the help of different types of research

methodologies so that the amin aim of the dissertation could be
accomplished.

3 References
Abreu, M. and Mendes, V. (2001) commercial bank interest margings and
profitability: evidence for some EU countries.
Bai, Q. (2019) The Impact of Third-Party Payment on Commercial Banking.
Service Science and Management, 08 (04): 147–154.
doi:10.12677/ssem.2019.84022.
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