Green FinTech and Sustainable Consumption: Does Digital Financial Innovation Encourage Environmentally Responsible Consumer Behavior?

Digital financial innovation is changing how households pay, borrow, save, compare products, and receive information. These changes can support environmentally responsible consumption by lowering transaction costs, improving access to environmental information, enabling digital incentives, and making low-carbon products easier to purchase. However, these technologies can also increase total consumption by making transactions more convenient, relaxing liquidity constraints, and encouraging frequent purchases. This study develops an evidence-based framework for examining whether Green FinTech encourages sustainable consumer behavior.The available evidence does not establish a universally positive environmental effect. Digital financial services may reduce emissions by changing consumption patterns while simultaneously increasing emissions through higher overall consumption. Consequently, the net environmental outcome may vary across households, countries, and economic contexts. The paper proposes a dual-mechanism model in which Green FinTech influences sustainable consumption through access, convenience, information, incentives, and financial capability while also affecting total consumption through scale expansion. It formalizes the net consumer environmental effect using a scale, composition, and technique decomposition, derives a break-even condition for consumption growth, and develops research propositions, an empirical design, and a Green FinTech Sustainability Index (GFSI) for household-level research. The central implication is that digital financial innovation becomes environmentally responsible only when improvements in consumption composition and resource efficiency outweigh the additional environmental burden created by increased consumption.