When FinTech Competes for Payment Flows

Résumé

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.

Mots-clés

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