Grey–Lotka–Volterra model for the competition and cooperation between third-party online payment systems and online banking in China

Abstract

In China, online banking and third-party online payment systems have a special relationship in which cooperation and competition co-exist. Quantifying the degree of competition and collaboration between them and predicting their future development trends will help to achieve a win-win situation. This paper uses the Lotka–Volterra model to quantitatively analyse and predict the impact of commercial banks’ online payment systems on the development of third-party online payment systems. The predator is an online bank, and the prey is a third online payment system. In the modelling process, the continuous model is discretized by using the grey theory. To improve modelling accuracy, a background coefficient is introduced. The parameters of the model are estimated by the least-squares method, and the Grey–Lotka–Volterra model for fitting the relationship between third-party payment and bank competition and cooperation is obtained. This paper empirically analyses quarterly transaction volume data for online banking and third payment. The results show that before 2011, the relationship between the two is more inhibition than cooperation, and the inhibition of online banking on third-party payment transactions is more significant than the third payment reaction. Only by strengthening cooperation can they win-win; the growth rate of third-party online payment transactions is more durable than that of online banking, but the market share is lower than that of banks; after 2011, the inhibition of third-party payment by banks is more significant than that of online banking. Compared with the period before 2011, this use decreased from inhibition to cooperation, and the growth of the overall turnover of the two plays a role in improving their development.