Lana Swartz on the Power of Payment Platforms

Big Tech

Are retail investors and message boards rewriting financial markets? The GameStop shakeup over the past week demonstrated how the market could be manipulated by users of the subreddit group WallStreetBets and robo-investing apps like Robinhood. The activities that happened in cyberspace on social media and financial digital platforms made waves in the real-world financial markets. Our guest Lana Swartz calls this moment infrastructural inversion, “when suddenly something stops working, and you realize all the things that went into making it work in the first place.”

Lana Swartz is an assistant professor of media studies at the University of Virginia and author of New Money: How Payment Became Social Media. Swartz has been researching the connection between social movements and money, such as Occupy Wall Street and cryptocurrencies.

Fintech has been a democratizing tool in the finance sector just as the early internet was in bringing social change. But payment platforms are acting much like social media platforms as they seek to centralize power and establish moderation rules. Swartz explains that “all of the work that has been done over the last decade or so to understand platforms now has to be applied to platforms like Robinhood and to see if there is something different about money, and if so, what is it? … Do they owe us more of a fiduciary role [and] how can we understand the mechanisms by which they are, in fact, constrained?” Robinhood’s decision to prevent users from purchasing GameStop stock demonstrated their position of power and has led to questions over whether they had the legal ability to do so. While moderating content on social media, especially disinformation and election manipulation, is important, the decisions around moderating the flow of money on payment apps has become a new area of importance to regulators.