Acknowledging the high penetration rate of mobile devices, mobile payment is currently a hot topic and is expected to reach the tipping point of rapid growth. For such a nascent market, a unified business model for successful mobile payment platform is not yet unveiled, especially in proximity payment applications. Players from all industries are trying to adopt different mobile payment technologies and look for corresponding profitable business model. Therefore, we devote this study to investigate the pricing strategy of proximity mobile payment. We hope to make a step forward to understand this promising market for mobile payment executives, financial institutes, and many other players in the ecosystem. Mobile payment serves as a two-sided platform connecting merchants and customers. Hence, we present a game-theoretic model featuring network externality. Our research suggests, at the beginning of the business, the platform has incentives to adopt the “divide and conquer” strategy. Customers are subsidized to adopt the mobile payment service, and then merchants will be attracted to join the platform due to the positive cross-side network externality. After the ignition, the platform then becomes profitable by charging per transaction fees from the merchants. If the consumption frequency is a function of the number of merchants or there is a system installation cost for each merchant, the same cross subsidization strategy is still optimal. In the long run, the cross subsidization strategy is suggested to be applied when the bank is not taking a too high processing fee and leaves sufficient market share to the mobile payment platform. Our research also shows that if the mobile payment platform considers customer-side transaction fee as a new revenue source, it can enhance its profitability. With different mobile payment technologies adopted, the optimal cross subsidization strategy may be to subsidize the merchants rather than customers.