Identifying the joint demand function with copula structure in bankcard market

Payment card industry is distinguished with its two-sided nature and the demand for payment card service is called joint demand. This article applies Copula functions to capture the non-linear and complex relationship between marginal demands, and moreover, estimates the joint demand function in China´s payment card industry, only to find that the t Copula function fits the relationship between issuing market and acquiring market. The joint demand function in China´s payment card market increases in the issuing market demand while it does not response sensitively to the acquiring market demand, and the profound and realistic reason lies in the distorted profit distribution system. The pattern of overvaluing issuing market but undervaluing acquiring market is unsustainable, and a secondary reform in payment card industry is definitely needed.