Payment Method Strategy Selection for Production-Capacity-Sharing Platform: Whether to Provide Online Payment Methods for Two-Sided Users

Abstract

Exemplified by EcoStruxure from Schneider and CASICloud, production-capacity-sharing platforms typically operate as two-sided platforms. These platforms contribute to carbon emission reductions while generating revenue through uniform membership fees, fixed service charges, or commission fees applied to one or both sides of the platform. As B2B platforms, however, they must determine whether to offer online payment options to participants on both sides of the market. We employ the theory of two-sided markets and the method of comparative analysis, developing a two-sided market model to investigate: (1) the platform’s optimal payment method selection strategies and (2) how same-side network externalities and user online search costs affect platform performance. We examine two payment modes: M mode (offline payments only) and F mode (combined offline/online payments). The F mode comprises two sub-modes—FF (two-sided users choose to pay offline) and FN (two-sided users choose to pay online)—determined by users’ payment preferences on each side. We conduct pairwise comparisons of the platform’s membership fee, fixed service fee, and online service level between: (i) FF and M modes and (ii) FN and M modes. Our results indicate that the optimal payment method selection varies across market conditions, with each mode demonstrating superior performance under specific market characteristics. The FF mode consistently yields higher profits compared to the M mode. When suppliers’ expected revenues fall below a certain threshold, the FN mode outperforms the M mode in terms of profit generation. Conversely, the M mode becomes preferable above this threshold. Furthermore, the effects of same-side network externalities and search costs vary significantly across different payment modes. Under the M mode and the FF1 mode, the effects of the same-side network externality on the platform’s membership fee are associated with two-sided users’ online search costs, which are more monotonous. Under the FN1 and FN2 modes, both the same-side network externality and two-sided users’ online search costs impact the platform’s optimal strategies monotonously, but they are not always the same in these two modes.