The Online Third-party Payment Strategies under Price War

Based on game theory, especially in "prisoner's dilemma game" model, it was analyzed that the price war among third party payment companies in China is inevitable. This paper presents some strategies that can help payment companies to improve advantages in competition and avoid the negative effects that the price war brings. Such as improving income model to increase the profit, providing different products to relieve competitive pressure, expanding value-added services like EDI, and building payment system based on XML to strengthen their construction.