Credit payment services and pricing strategy in the digital economy era

This study investigates a digital e-commerce supply chain comprising a manufacturer and a retailer, wherein the manufacturer and retailer simultaneously decide whether to implement credit payment service in their respective selling channels. According to this arrangement, we specifically consider four scenarios: neither firm implements credit payment service (NN), only the manufacturer implements credit payment service (AN), only the retailer implements credit payment service (NR), and both firms implement credit payment service (AR). We uncover that the manufacturer may prefer Scenario NN or AR, whereas the retailer may prefer Scenario NR or AN. Specifically, when the discount factor for credit payment service is lower than the discount of cash opportunity cost, the manufacturer prefers Scenario AR and the retailer profits most in Scenario NR; otherwise, the manufacturer profits most in Scenario NN and the retailer achieves the highest profit in Scenario AN. Furthermore, our results unveil that the whole supply chain prefers Scenario AR or NR when the discount factor for credit payment service is smaller than the discount of cash opportunity cost. However, the whole supply chain prefers Scenario NN or AN when the discount factor for credit payment service is larger than the discount of cash opportunity cost.