Publications
Publications
- Forthcoming
- Journal of Finance
FinTech Lending and Cashless Payments
By: Pulak Ghosh, Boris Vallée and Yao Zeng
Abstract
Borrower's use of cashless payments both improves their access to capital from FinTech lenders and predicts a lower probability of default. These relationships are stronger for cashless technologies providing more precise information, and for outflows. Cashless payment usage complements other signals of borrower quality. We rationalize these empirical findings with a framework where borrowers signal their lower likelihood of diverting cash flows through payment technology choice, and where screening accuracy is further strengthened by informational complementarities. The informational synergy we uncover provides a rationale for the joint rise of cashless payments and FinTech lending, as well as for open banking.
Keywords
Fintech; Lending; Payments; Data Sharing; Financing and Loans; Information Technology; Banks and Banking; Business Model
Citation
Ghosh, Pulak, Boris Vallée, and Yao Zeng. "FinTech Lending and Cashless Payments." Journal of Finance (forthcoming).