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

Xiang Gong, Christy M.K. Cheung, Shan Liu*, Kem Z.K. Zhang, Matthew K.O. Lee

*Corresponding author for this work

    Research output: Contribution to journalJournal articlepeer-review

    17 Citations (Scopus)

    Abstract

    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.
    Original languageEnglish
    Pages (from-to)696-728
    Number of pages33
    JournalInformation Systems Journal
    Volume32
    Issue number4
    Early online date3 Sept 2021
    DOIs
    Publication statusPublished - Jul 2022

    Scopus Subject Areas

    • Software
    • Information Systems
    • Computer Networks and Communications

    User-Defined Keywords

    • institutional mechanism
    • mixed methods approach
    • mobile payment applications
    • network effect
    • network structure
    • technology complementarity

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