DP17297 Big techs, QR code payments and financial inclusion

Author(s): Thorsten Beck, Leonardo Gambacorta, Yiping Huang, Zhenhua Li, Han Qiu
Publication Date: May 2022
Keyword(s): Asymmetric information, banks, Big Data, big tech, credit markets, financial inclusion, QR code
JEL(s): D22, G31, R30
Programme Areas: Financial Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=17297

Using a unique dataset of around half a million Chinese firms that use a QR code-based mobile payment system, we find that (i) the creation of a digital payment footprint allows firms to access credit provided by the same big tech company; (ii) transaction data generated via QR code generate spillover effects on access to bank credit; and (iii) there are positive effects of access to big tech credit on sales, including during the Covid-19 shock. The findings suggest that access to innovative payment methods helps micro firms build up credit history, and that using big tech credit can ease access to bank credit.