Introduction
With the opening of the 4th revolution era, platform business started to come into the spotlight. It was in the early 2000s that academics started full-scale research on platform based on the two-sided market theory but in fact the two-sided market is a business model that has existed around us since before. Examples include credit card industry, real estate brokering, and auctions. These industries are creating value through the interaction of two markets of different needs through a company that provides a specific platform (Rochet and Tirole, 2003, 2006). Recently, with the widespread use of services and products based on high technology, platform business is pouring into our lives at an amazing speed. With a single ID, you can shop, pay for, and receive shipping from a variety of online stores, without having to go through a lot of memberships. You do not have to search every single hotel for the best price, best location. You can even find a room in the house and see the reviews of customers who have stayed there. Compared to traditional pipeline business, one of the key differentiating features of the platform business is a two-sided network effect where consumers and consumers, producers and producers, and consumers and producers interact with each other. This two-sided network effect, with a positive feedback loop, has become a major driver of platform company growth. In the two-sided market, the platform‟s value to any given user largely depends on the size of the users on the other side of the platform due to the indirect network effect (Evans, 2003; Parker & Van Alstyne, 2005). Therefore, increasing the size of one side market, including the issue of „chicken or egg‟, is an indispensable task for the platform managers to maximize platform performance. But more important than increasing the size of one side of the market is transforming the new customers to loyal customers and creating positive feedback loops. This study explores the process of online payment platform users signing up, forming user loyalty, and spreading the loyalty to the sellers and platform providers. More specifically, this study examines (1) what causes the consumers to join the online payment platform at the beginning (2) what are the drivers that lead new members to the active, loyal users (3) whether the loyalty to the payment platform has a positive effect on the attitude toward the sellers (the other side market) and the platform company (platform provider).
Theoretical Background and Hypotheses
Two- Sided Markets and the Platform
The definition of the two-sided market is varied by scholars. Chakravoti and Roson (2006) defines the two-sided market as a market where two different groups of users interact through the platform and the value created at this time is influenced by the indirect externalities of the network. Here, the platform is a physical, virtual, or institutional environment that allows different groups of users to facilitate transactions or interactions. According to Evans (2003), three necessary conditions for two sided platform markets are: (1) there are two distinct groups of customers; (2) there are externalities associated with customer A and B becoming connected or coordinated in some fashion; (3) an intermediary can facilitate that coordination efficiently than bi-lateral relationships between the members of the group. For example, we can think of a credit card company. There is a group of card holders and merchants and the demands of these two groups are very different. There is also a network effect between the two groups. Customers will not use credit cards with fewer merchants. The greater the number of merchants, the greater the benefits the customers have. Likewise, the more cardholders there are, the more profitable the merchants can generate. The intermediary role of the two groups of users to interact is a credit card company.
Perceived value and Loyalty to the Online Payment Platform
The loyalty to the online payment system can be expressed as the level of participation and commitment the member has over other similar payment systems. O‟Brien and Jones (1995) argue the value perception as an important prerequisite factor in developing brand loyalty; that is, only after the customer has perceived the online payment system as valuable, then would the customer become loyal to the system. The expectations that the perceived value can affect the loyalty to the online payment platform may be explained in terms of “Social Exchange Theory” (Thibaut and Kelly 1959). Within this framework, the customer will remain in the platform only when he or she perceives the value, which is defined as a trade-off between costs and benefits (Woodruff and Gardial 1996) is sufficient. Overall, perceived value of the online payment platform would affect customer loyalty. More specifically, it is expected that non-economic values such as simplicity in account setting, convenience in use will have a more meaningful effect than the economic value including sign-up grant at the stage of attracting new customers. But in the process of new customers becoming active and loyal users, the economic value including mileage points, discount coupons and free trial coupons will play a more important role in addition to this convenience. For example, benefit of being able to use the accumulated mileage or discount coupon on any online store within the platform will make consumers to stay on this payment platform and become loyal customers.
Based on such argument, we put forward the following hypothesis.
H1: Non economic value has a positive effect on online payment platform loyalty
H2: Economic value has a positive effect on online payment platform loyalty.
Loyalty Transfer
According to Eisenmann et al. (2006), the platforms exhibit two types of network effects: A same-side effect, in which increasing the number of users on one side of the network makes it either more or less valuable to users on the same side; and a cross-side effect, in which increasing number of users on one side makes it either more or less valuable to the users on the other side. In case of online payment platform, it is expected that there will be a positive cross-side network effect. As the number of consumers using a specific online payment platform increases, the number of partner shops participating in the platform will increase, allowing consumers to shop in more diverse online stores. Once customers experienced the value of a specific online payment system, they would insist on paying by this method when shopping online (Parker, Alstein and Choudary, 2016), that is, becoming a loyal customer. Oliver (1999) defines customer loyalty as a deeply held commitment to re-buy or re-patronize a preferred product or service consistently in the future, thereby causing repetitive same brand purchasing. The loyal customers will be among the many online stores selling the same products/services at a same price, shopping at stores that show their favorite online payment system logo, and encouraging friends and family to use the payment system. The frequent transactions will affect consumer‟s attitude towards a certain brand or store and diffuse their loyalty. The customers that are loyal to the payment platform will not only actively try to earn points but also be willing to go and shop at the stores participating in the platform. Some customers may prefer a store among many even though they have not used it before because it belongs to the platform. The loyalty to the platform also can be transferred to the loyalty on the platform provider. Customers will have a favorable attitude when the platform providers do other business (for example, online banking, debit card business, etc.).
Given the above, we put forward the following 3 hypotheses.
H3: Platform loyalty has a positive effect on the loyalty toward the sellers, the other side market.
H4: Positive attitude toward the sellers within the platform has a positive effect on attitude toward the platform company
H5: Platform loyalty has a positive effect on the attitude toward the platform company.
Conceptual Framework
Data Analysis and Results
The data used in this study were obtained from a survey of 562 online payment platform users. Data analysis shows that non-economic values such as simplicity, convenience, and platform reliability have a more significant impact on platform loyalty than economic values such as sign-up bonus. However, it was found that economic factors such as mileage points, and discount coupons are more influential factors in the process of converting new members to active users. In addition, loyalty to the payment system has a positive effect on attitudes towards sellers where one can use the means of payment. Also, it can be seen that the customer loyalty to the platform and the favorable attitude toward the sellers make a favorable attitude toward the platform company providing and managing the two-sided market.
Conclusion and Discussion
This study may contribute to a better understanding of platform business in three particular ways. First, understanding the loyalty diffusion mechanisms within the platform can support platform companies to develop effective strategies to attract new consumers to the platform and to transform them into active users. Second, even though the study uses the data collected from individual consumer level, the findings may provide some inspiration for B2B relationships. For example, as the number of loyal buyers and sellers sharing the platform increases, the value of the platform increases and the platform company can use it as a powerful bargaining power when it comes to third business. Third, the study may help us to understand the role of Platform in two-sided market and how the customer loyalty becomes diffused. Although this study explored the loyalty formation and diffusion using the sample of the major payment systems in Korea, it may be premature to generalize the findings at this stage. It is important to note that there may be negative network effects. They need to be evaluated further through careful research.

• So-Young Lee(Hoseo University, Republic of Korea)