Using Attachment Curves Model to study the group externality of China's bankcard industry

The most fundamental attribute of two-sided markets lies in their group network externality. This paper turns to the Attachment Curves Model and some econometrical methods, carrying out an empirical testing and measurement on the group network externality in the bankcard industry of China. The results suggest that China's bankcard industry is characterized by a weak and asymmetric nature of two-sided market. The expansion of acquiring market gives rise to an increase in the user-base of cardholder, while the similar effect does not work in turn. The profound reason lies in the distorted income distribution system of China's bankcard industry, and thus a reform in distribution system is essential for China's bankcard industry to gain a further development.