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P2P Lending and Mobile Payments: Disrupting Traditional Banking Systems and Expanding Financial Inclusion
- 1 The University of Manchester
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Abstract
Technological development in the field of finance (FinTech) has sprouted and scaled up rapidly, disrupting the traditional banking system. The rise of new platforms allowing P2P lending and mobile payments has changed the way where and how people receive financial services by replacing professionally-managed financial intermediaries aka banks. This paper explores how P2P lending has enabled decentralised financing by providing flexible loans to borrowers, higher returns to lenders, and alternative credit-scoring methods to assess borrowers’ credibility. The subsequent development and recent widespread use of mobile payments have brought about transformative changes in finance where users can make payments without using physical cash or relying on banking infrastructure altogether. The combination of these technologies is providing inclusive finance by allowing unbanked and underbanked populations access to necessary financial services. This paper further delves into the challenges emerging from both these innovations, such as assessment of risks, security issues and regulatory uncertainty. The paper concludes by emphasising that new technology-based lending and payments have the potential to foster inclusive economic growth in rural, remote and low-income regions of the world, and by highlighting the challenges that needs to be tackled for FinTech to succeed.
Keywords
P2P lending, mobile payments, financial inclusion, FinTech, decentralized finance
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Cite this article
Tang,N. (2024). P2P Lending and Mobile Payments: Disrupting Traditional Banking Systems and Expanding Financial Inclusion. Journal of Applied Economics and Policy Studies,11,81-85.
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Journal：Journal of Applied Economics and Policy Studies
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