Mobile Payment Service and the Firm Value: Focusing on both Up- and Down-Stream Alliance

Abstract

The Fintech business, which was initially focused on the payment sector, is becoming a global issue due to the entry of nonfinancial firms into the banking business. With the advent of the “mobile age in your hand”, global ICT companies are actively entering the banking business through alliances and competitions with existing financial companies. Classifying the alliance companies of Apple Pay and Samsung Pay into the downstream alliance and the upstream alliance, this study analyzed the signaling effect of service opening and its impact on the firm value. To analyze the effect of a specific event on firm value, this study adopted the event study. Additionally, ordinary least squares regression analysis was carried out to examine the influence of up- and downstream alliance on the firm value. The result shows that Apple Pay’s service launch in the USA. has a positive impact on stock prices of up- and downstream alliance companies, providing new experience and satisfaction to users through active alliance with credit card companies. On the other hand, downstream alliance companies that showed a negative response to the launch of Korean services turned to a positive response to USA service launch because to the difference in the specificity of credit card penetration rate and the portion of premium smartphones. Analyzing the impact of the expansion of the service area toward the payment platform on the firm value, research results provide important implications for establishing technology management strategies to ensure the sustainability in rapidly changing technical advances by comparing the different market response of Apple Pay and Samsung Pay.