Digital Platforms and Sustainable Developments: Regulating BigFinTechs for Digital Financial Inclusion

Abstract

The emergence of large technology firm’s (so-called BigFinTechs) in payments systems through mobile account payment services has increased financial inclusion among marginalized unbanked segments globally. Since the last global crisis, especially after the emergence of the COVID-19 pandemic, the focus of international policymakers and regulators has extended beyond deepening account penetrations to include the promotion of broader consumer choice in payment options and transparency in digital financial services. This paper reinforces the argument that these revised objectives are particularly achievable through the development of open interoperable frameworks among competitive payments service providers. However, the existing regulatory approaches towards interoperability among BigFinTechs and incumbents lack the scope and economic incentives for new tech entrants to stimulate market-driven developments in financial inclusion. This paper therefore argues for the adoption of intermediated hybrid retail CBDC models in the promotion of open interoperability among BigFinTechs by enabling level playing field among service providers through access to public payments infrastructure.