Case Study
Case Study
1
Exhibit 1: Porter’s 5 Forces of Digital Payment Industry
Consumers
5
New
Suppliers
entrants
3 2
4 4
Substitutes Competition
Reluctant-to-change Consumers: Consumers strike the strongest power- Low switching cost if
changing payment provider- generous incentive of competitors encourage consumer trying
new payment service; traditional and new payment methods provide multiple choices
Intense Competition: Multiple choices available in the market with no-so-different features.
Start-ups and retailers are developing user-friendly platforms to attract new customer.
Attractive Substitutes: Traditional major players such as financial institutions and credit card
companies offering convenient payment methods and huge incentive to maintain market
share
New entrants: Medium industry barriers: strong financial regulations but not require intensive
capital investment. Tech companies and start-ups are potential new entrants
Suppliers: Low power