Cross-Platform Digital Payments and Customer-Driven Data Sharing: Implications for Credit Access
Working Paper 33259
DOI 10.3386/w33259
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Does the ability to generate verifiable digital financial histories, for payments across apps and banks, improve credit access? We answer this using India’s launch of a cross-platform digital payment infrastructure (UPI). Using rarely available data on the universe of consumer loans, we show credit increases by both fintechs (new entrants) and banks (incumbents), on the intensive and extensive margin, to subprime and new-to-credit customers. We show several mechanisms at play: low-cost internet improves credit access, lenders weigh in digital histories, newly established bank accounts matter, and customer-driven digital data sharing across platforms enables access to formal credit.