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FinTech Lending and Cashless Payments

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  • PULAK GHOSH
  • BORIS VALLEE
  • YAO ZENG

Abstract

Borrowers' use of cashless payments 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 using a framework in which borrowers signal their lower likelihood of diverting cash flows through payment technology choice, and 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.

Suggested Citation

  • Pulak Ghosh & Boris Vallee & Yao Zeng, 2026. "FinTech Lending and Cashless Payments," Journal of Finance, American Finance Association, vol. 81(2), pages 1053-1101, April.
    • Handle: RePEc:bla:jfinan:v:81:y:2026:i:2:p:1053-1101
    DOI: 10.1111/jofi.70003
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