Battles of mobile payment networks: The impacts of network structures, technology complementarities and institutional mechanisms on consumer loyalty

Most information systems (IS) research takes for granted that consumers' adoption and the use of mobile payment (MP) applications are motivated by generic factors such as perceived usefulness and perceived ease of use. Challenging this assumption, we argue that the salient contextual characteristics of MP applications compel a reconsideration and problematization of research on MP adoption and use. Drawing on network effect theory, we examined how contextual network effects and contextual network types determine MP consumer loyalty. Using a mixed methods design, we find that direct network effects (i.e., network size, network centrality, network capability), indirect network effects (i.e., platform–application complementarity, application–service complementarity, service–strategy complementarity) and negative network effects (i.e., general institutional structure, general structural assurance, local institutional structure and local structural assurance) are key determinants of perceived benefits, which further promote MP consumer loyalty. Furthermore, except for general institutional structure and general structural assurance, all of the network effects are important predictors of switching costs, which influence MP consumer loyalty. Finally, the impacts of network effects on MP consumer loyalty differ between consumer- and service-oriented networks. Our study enriches the IS literature by problematizing the core assumption underlying the MP adoption and use research and offering a contextual explanation of MP consumer loyalty. Our work also provides practitioners with insights into how to better leverage network effects on MP consumer loyalty.