PayTech and the D(ata) N(etwork) A(ctivities) of BigTech Platforms

Jonathan Chiu and Thorsten Koeppl

Staff Working Papers from Bank of Canada

Abstract: Why do BigTech platforms introduce payment services? Digital platforms often run business models where activities on the platform generate data that can be monetized off the platform. There is a trade-off between the value of such data and the privacy concerns of users, since platforms need to compensate users for their privacy loss by subsidizing activities. The nature of complementarities between data and payments determines whether and how payment services are provided. When data help to provide better payments (data-driven payments), platforms have too little incentive to adopt. When payments generate additional data (payments-driven data), platforms may adopt payments inefficiently.

Keywords: Digital currencies and fintech; Payment clearing and settlement systems (search for similar items in EconPapers)
JEL-codes: D8 E42 L1 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2022-08
New Economics Papers: this item is included in nep-big, nep-mic, nep-pay and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:bca:bocawp:22-35

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