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Payment Systems as a Driver for Platform Growth in E-Commerce: Network Effects and Business Models
Abstract
This chapter visits some of the fundamental concepts from platform economics, network effects, and network externalities. Further on, it discusses definitions of two-sided and multi-sided markets, how they are treated as business models. These concepts are further compared to the concept service ecosystem. A case of a payment service provider whose business model contributes to the growth of e-commerce is included. The purpose is to tease out how research on platforms has developed since e-commerce was in its infancy. The fundamental concepts developed in network economics are still valid and have been translated into different fields with a focus on value creation, information, and interaction. How platforms within platforms spur each other's growth is an area that has the potential to reach new insights on the platform economy.
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