The method of enquiry for this dissertation is an interpretative multiple case study to uncover disruptive potential mechanisms and design elements among digital platforms (Walsham 1995; Yin 2009). In so doing, my study embraces an exploratory (Theory I) and prescriptive approach (Theory V) (Gregor 2006) by synthesizing key concepts from strategic management, digital platform, and innovation management literature to conceptualize an analytical lens for identifying (1) the constituent strategic design elements of digital platforms, and (2) configurations that create favorable conditions for open innovation capabilities. It is contended that the interplay between the three design elements and their configurations towards open innovation capabilities may create conditions for (3) facilitating disruption. If successful, it is basically a potential candidate for a new standard or dominant design.
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Specifically, I argue that disruptive digital platforms are based on strategic design element configurations (i.e., Business Design, Architecture Design and Technology Design). The interplay among the three design elements may create new differentiating value creation logics within value networks such as in payments industries that are atypical to established innovations offered by incumbents (banks). I deem the case study approach to be a suitable method of enquiry for my dissertation as it can answer “how” and “why” questions in complex, nebulous, and contemporary research environments, where the study object cannot be manipulated in its real-word context (Dubé et al. 2003; Yin 2009). As this dissertation attempts to provide an understanding of how digital platform owners can design their systems towards supportive conditions that facilitate disruption (or why not), the case study approach is considered to be appropriate for untangling the intertwining relationships among the three design elements and its configurations towards open innovation capabilities. I posit that digital platforms that design towards open innovation capabilities diverge compared to traditional organizations and their established innovations, which may result in supportive conditions that facilitate disruption.
Data Collection: Semi-Structured Interviews & Secondary Resources
The empirical basis for this dissertation is two sources: primary (semi-structured interviews) and secondary data (archival records) (see Table 4). In regards to semi-structured interviews, the interview questions have been derived from my proposed digital platform disruption model to understand events and decisions on how and why digital payment platform owners design and configure platforms from a strategic, architectural, and interfacing point of view. I paid close attention to how digital platforms create and deliver their digital services through different payment infrastructures and how access to third parties is granted. Semi-structured interviews have the advantage of allowing the interviewer to capture additional insights (e.g., publicly inaccessible data) that may enrich the study further. Specifically, I was interested in gleaning insights about constituent design elements of digital platforms that create conditions for open innovation. Semi-structured interviews have been conducted largely in the Danish and British payment industry. Cross-country comparisons will allow me to derive country-specific as well as generic patterns in how digital payment platform owners design their platforms. In terms of interview partners, I first contacted knowledgeable industry experts within payment organizations, consultancies, and associations based on their job titles and job descriptions. The interviews with industry experts bring the benefit of gleaning insights about the structure of payment landscapes, and the underlying and influencing market forces, as well as identifying key actors that enable payment services in the first places (e.g., payment infrastructure providers). Subsequently, I contacted leading payment providers within Denmark and the UK. Within these organizations, I solicited interview partners (e.g., senior management) who are knowledgeable with regards to platform architecture, business partners, and strategies. Payment entrants or challengers exhibit the attributes of growth and agility while leveraging
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on new and affordable technologies that replicate the services of incumbent organizations. To complement my primary data collection efforts, I distilled payment reports, white papers, press releases, and archival records from industry associations (e.g., the European and UK Payments Council), payment industry online news outlets (e.g., Finextra), and news aggregators (i.e., the Paypers, Techmeme), actors, and identifying commercially active mobile payment services. Blog aggregators have the advantage of serving as a filter, as they tend to highlight influential articles (Davidson & Vaast, 2009; Eaton, Elaluf- Calderwood, Sørensen, & Yoo, 2015).
More importantly, I reconstructed national payment industries with their respective actors to understand the current state of how digital payments are mediated. The reconstruction provides me with initial insights about the logic of existing payment industries and their actors, arguably many of them currently presenting sustaining innovation efforts by current incumbent organizations. My interview strategy was to understand how digital payment platform works in practice (i.e., reconstructing narratively and visually payment transactions) and who are the external partners that are vital in providing the required resources and capabilities that ultimately enable payment services. Specially, I was interested to glean insights about how market competition takes place on the value creation and value delivery architecture. Semi-structured interviews were recorded and transcribed subsequently for coding purposes.
Table 4. Primary Data Sources Data Points Type
(In total 27)
Description
Industry Experts
(In total 3)
United Kingdom:
Berenberg Bank [Investment Bank]—VP Equity Analyst on Financial Technology
(61 min),
Consult Hyperion [Consulting Firm]—Payment Consultant (48 min),
IBM [IT & Software provider]—Executive Architect for Banking Industry Innovation (72 min).
Payment Service Providers
(In total 13)
United Kingdom:
Paym [National Mobile Payment Service]—Head of Development (65 min),
Barclays’ Pingit [National Mobile Payment Service]—SVP of Mobile Solutions (66
min)
Zapp [National Mobile Payment Service]—CEO (44 min),
Droplet [Mobile payment Start-Up]—CTO (68 min),
FirstRemit [Remittance Start-up]—CEO (113 min),
HSBC [British Multinational Bank]—Global Head of Digital Payments (85 min),
Google Wallet [Mobile Wallet Service]—Head of Payments (41 min),
American Express [Credit Card Firm]—Mobile Product Innovation & Strategy (113
min),
Santander: [Multinational Bank]—Innovation Analyst (210 min).
Denmark:
AltaPay [Payment Gateway]—CTO (80 min),
Beeptify [Payment Start-Up]—CFO (56 min),
42 min),
Saxo Payments [Global Payment Provider]—CEO (74 min).
Payment Infrastructure providers
(In total 7)
United Kingdom:
Currency Cloud [Payment provider]—Forex Business Solutions (86 min),
Payments Council [Payment Industry Body]—Head of Innovation (64 min),
Vocalink [National Payment Infrastructure Provider]—Strategy Lead (125 min),
WorldPay [Merchant Acquirer]—Director Technology Innovation (45 min).
Denmark:
Danish National Bank [Central Bank]—Head of Payments (76 min),
NETS [National Payment Infrastructure Provider]—Head of Corporate Strategy (84 min).
Unwire: payment technology provider - VP Strategy (67 min). Cryptocurrency
Providers (In total 4)
United Kingdom:
CryptoPay [Bitcoin Payment Processor]—CEO (112 min),
CEX.io [Bitcoin Exchange]—CEO (45 min),
Blockchain.info [Bitcoin Wallet & Analytics Provider]—CEO (82 min).
Denmark:
Sirious Money [Bitcoin ATM Provider]—CEO (88 min).
Data Analysis: Theoretical Thematic Analysis
Thematic analysis has been applied in this article based dissertation (Boyatzis 1998; Braun et al. 2006). Specifically, I applied theoretical thematic analysis (Braun et al. 2006). Compared to inductive thematic analysis, where the analysis process is data driven (i.e., bottom up approach), the theoretical thematic analysis process has a deductive approach (i.e., top-down approach), which is guided by concepts or theory. To begin with, the interviews of the studied case companies have been transcribed and imported to Nvivo 10, a qualitative analysis software program that allows one to collect and categorize data in a structured way. Coding categories and themes were predetermined by the proposed digital platform disruption model. In this sense, my proposed model served as a theoretical guide during the analysis process (see Table 5).
Table 5. Coding Examples from Data Analysis
Exemplary Quote Synthesis
Bu sin ess De sig n
“[…] I can't remember the number, and we have about 14 million consumers that we provide current account services and the likes to and we have an additional six million on top of that that we probably provide credit card services to. So it's a fairly significant organization here in the UK. For us,
innovation is a major element of our strategy.”
Analyzer Business Design Profile: Platform strategy profile that emphasizes control as a market incumbent, while at the same time allowing moderated flexibility in its operations. Arc h it ec tu re De sig n
“So the consumer side, we provide the app that runs on the different
smartphone platforms or tablets.”
“In terms of the support that we provide for Pingit for consumers, we're running on certainly iOS, on Android, on Blackberry or—and Microsoft now as well.”
Hybrid Architecture Design Profile: Platform architecture profile that shares certain layers with third parties, while guarding the most valuable ones for control.
43 Tec h n o lo g y De sig n
[…] it will be a lot of rigor around analyzing what those API's and what
information they have access to […]
[…] It has to be, of course, then commercially relevant to be disclosing any API's to that party… […]
Compatibility Technology Design Profile:
Platforms offer boundary resources that allow controlled interfirm modularity and open innovation.