Pricing Decisions of FinTech Firms

Abstract

The purpose of this study is to analyze the pricing strategies of French FinTech Firms (FFFs) using quantitative descriptive and correlational research methods. Based on a representative sample of 246 FFF, the study provided consistent support for the hypotheses, which argues that FFFs with high price-setting power may implement a combination of the price-setting strategy (PSS) “skimming” and the price-setting practice (PSP) “value-informed”. FFFs applying “market-based” PSSs tend to use “competition-informed” PSP preferring “pay-per-use” price-setting model (PSM). Whilst FFFs who apply “penetration” PSS tend to use “cost-informed” PSP and “pay-per-use” PSM. The findings support founders and senior management in their pricing decisions. This paper contributes to the existing literature on pricing strategies of early-stage high-tech companies. There is a need for further research about the change of pricing strategies during the lifecycle of a firm using for example a longitudinal quantitative study.

A Systematic Literature Review of Dynamic Pricing Strategies

“…demand and supply). Apart from that, research confirms that some consumers prefer stable or static prices, even if they are higher like for example in the healthcare or financial service industry (Neubert, 2020).…”

“…This is demonstrated by observations of the airline and the hospitality industries, where dynamic pricing is seen as fair based on consumers' knowledge of shift in demand in situations in which there are limited resources (Mitra, 2020;Viglia et al, 2016;Kwok & Xie, 2019). The research above also leads to the assertion that this phenomenon has expanded into newer areas where consumers understand the presence of limited resources, such as the public transportation, parking, education, financial services, and energy sectors Subramanian & Das, 2019;Saharan et al, 2020;Katz et al, 2016;Hanna et al, 2019;Neubert, 2020). Other industries that seek to use dynamic pricing can optimize their sales if they are willing to openly declare how and why dynamic pricing is taking place, with increased understanding generated if the retailers are willing to disclose their policies and practices.…”