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When FinTech Competes for Payment Flows

Uday Rajan (University of Michigan)


We study the impact of FinTech competition in payment services when a bank uses payment data to learn about consumers' credit quality. Competition from FinTech payment providers disrupts this information spillover. The bank's price for payment services and its loan oers are aected. FinTech competition promotes nancial inclusion, may hurt consumers with a strong bank preference, and has an ambiguous eect on the loan market. Both FinTech data sales and consumer data portability increase bank lending, but the eects on consumer welfare are ambiguous. Under mild conditions, consumer welfare is higher under data sales than with data portability.


FinTech, BigTech, payment, competition, banks, credit market;

Codes JEL

  • D43: Oligopoly and Other Forms of Market Imperfection
  • G21: Banks • Depository Institutions • Micro Finance Institutions • Mortgages
  • G23: Non-bank Financial Institutions • Financial Instruments • Institutional Investors
  • G28: Government Policy and Regulation


Uday Rajan (University of Michigan), « When FinTech Competes for Payment Flows », 2nd Sustainable Finance Center Conference, TSE, Toulouse, 2021.

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Publié dans

2nd Sustainable Finance Center Conference, TSE, Toulouse, 2021