Financial Inclusion via FinTech: From Digital Payments to Platform Investments
73 Pages Posted: 30 Oct 2020 Last revised: 2 Apr 2025
There are 3 versions of this paper
Financial Inclusion via FinTech: From Digital Payments to Platform Investments
Fintech Adoption and Household Risk-Taking
Fintech Adoption and Household Risk-Taking: From Digital Payments to Platform Investments
Date Written: September 30, 2021
Abstract
We study household finance in the age of FinTech, where digital payments are integrated with various financial services through all-in-one super-apps. We hypothesize that increased FinTech adoption via digital payments can lower the non-monetary costs (e.g., psychological barriers) associated with financial market participation. We find that higher FinTech adoption leads to greater participation and increased risk-taking in mutual fund investments. Using distance from Ant as an instrument for FinTech penetration, as well as the exogenous penetration of QRPay in Shenzhen, we further provide causal evidence from digital payment to risky fund investment. Moreover, the effect of FinTech is stronger among individuals who are otherwise more constrained, those with higher risk tolerance, or those living in under-banked counties.
Keywords: FinTech, Digital Payment, Financial Inclusion, Household Finance, Risky Asset Investment
JEL Classification: G11, G50
Suggested Citation: Suggested Citation