job market paper

Financial Technology Adoption, Network Externalities, and Retail Competition

Abstract: Financial technologies have network externalities; as a result, a substantial portion of the overall welfare effects of consumers’ fintech adoption might accrue to retailers and spill over to other consumers. In this paper, I exploit a natural experiment that caused exogenous shocks to the adoption of a financial technology over time and space: between 2009 and 2012, the Mexican government disbursed about one million debit cards as the new payment method for its conditional cash transfer program. Notably, this created large increases in the local fraction of households with debit cards, and only affected the cost of technology adoption for a subset of participants on one side of the market—enabling me to measure responses by retailers and spillover effects onto other consumers. I combine administrative data on the debit card rollout with a rich collection of Mexican microdata including the universe of point-of-sale (POS) terminal adoptions and card transactions, household-by-product-by-store-type consumption data, product-by-store-by-week price data, and a panel of retailer profits. The shock to debit card adoption leads to a dynamic increase in fintech adoption on both sides of the market: small retailers (corner stores) adopt POS terminals to accept card payments, which has a spillover effect on card adoption by other consumers. Richer consumers respond to corner stores’ adoption of POS terminals by substituting 13% of their supermarket consumption to corner stores. Corner stores experience increased profits after adopting, by increasing their purchases and sales of merchandise while keeping other input costs fixed.


Digital Financial Services Go a Long Way: Transaction Costs and Financial Inclusion (with Pierre Bachas, Paul Gertler, and Enrique Seira). AEA Papers & Proceedings, 108, 444-448, 2018.

Can a Poverty-Reducing and Progressive Tax and Transfer System Hurt the Poor? (with Nora Lustig). Journal of Development Economics 122, 63-75, 2016.

Comparing the Incidence of Taxes and Social Spending in Brazil and the United States (with Nora Lustig, Whitney Ruble, and Timothy M. Smeeding). Review of Income and Wealth 62, S22-46, 2016.

The Effects of Brazil’s Taxation and Social Spending on the Distribution of Household Income (with Claudiney Pereira). Public Finance Review 42, 346-67, 2014.

working papers

How Debit Cards Enable the Poor to Save More (with Pierre Bachas, Paul Gertler, and Enrique Seira). NBER Working Paper 23252.

The Political Economy of Antipoverty Spending and Poverty Measurement (with Stefano Barbieri).

work in progress

The Long-Term Effects of Temporary Incentives to Save: Evidence from a Prize-Linked Savings Field Experiment (with Paul Gertler, Aisling Scott, and Enrique Seira). Draft coming soon.

Bank Non-Secrecy: Taxation and Financial Service Use in Mexico (with Pierre Bachas and Anders Jensen. Draft coming soon.

Digital Sales and Inventory Data to Assess Creditworthiness (with Paul Gertler, Ulrike Malmendier, and Waldo Ojeda). Pilot completed.

Leveraging Government Transfers to Offer Low-Risk Microcredit in the Dominican Republic (with Frederico Finan, Seth Garz, and Paul Gertler). Randomization stage.