Green Finance and Digital Payments: Innovations for a Sustainable Financial Ecosystem

The rapid evolution of financial technology (FinTech) has transformed payment systems, enhancing convenience, accessibility, and efficiency. Digital payments, particularly mobile payment services (MPS), have played a crucial role in financial inclusion, driven by initiatives such as India's PMGDISHA and Jan Dhan Yojana. However, this transformation has introduced challenges, including security risks, cyber threats, and environmental concerns. Artificial intelligence (AI), blockchain, and cryptocurrencies have emerged as key technologies in addressing these issues, enabling real-time fraud detection, risk assessment, and secure transactions. A growing emphasis on sustainability has led to green payments, prioritising eco-friendly transaction methods such as digital payments, contactless systems, and biodegradable payment cards. Consumer awareness and financial incentives drive this shift, with platforms like UPI and digital wallets reducing reliance on resource-intensive payment processes. Furthermore, research highlights the environmental benefits of digital payments compared to traditional banking, though energy consumption and regulatory challenges remain key concerns. Financial inclusion remains a central focus, with mobile money solutions and Aadhaar-enabled payment systems (AEPS) bridging economic gaps in underserved regions. Despite significant progress, barriers such as digital literacy, security concerns, and regulatory complexities persist. Governments and financial institutions continue to refine policies to balance innovation with security and sustainability, ensuring a more inclusive and environmentally responsible digital financial ecosystem.