Effect of Digital Financial Literacy on Digital Consumer Protection: Mediating Role of Financial Self-Efficacy and Financial Confidence

Introduction

The term digital consumer is gaining importance in today's dynamic digital age. Due to the rapid development of technologies, the financial decisions made by consumers are also changing. Given the scenario, it is important to identify how the digital consumer differs from the traditional consumer, and attention needs to be given to this transition. Financial literacy may not necessarily translate into a protection shield for online shoppers, as literacy in the traditional context is insufficient in the digital context. The digital consumer needs to adapt to the changing context and needs to acquire relevant skills and abilities to make responsible financial decisions. In this age, consumers must develop their digital financial literacy to protect their interests in digital platforms (Koskelainen et al., 2023). Improving one’s Digital Financial Literacy helps people protect themselves on digital platforms concerning finances (Yadav & Banerji, 2023). It is coming to attention that as people engage in more and more financial transactions, the risk related to it also increases in the same magnitude. Although it is said that the customer is the king, it is not that easy to practically work the same in the digital world that is driven by nudges and scams. In this scenario, digital consumer protection needs to be recognized. Lyons & Kass‐Hanna (2021) confirm that there is a need for research in digital financial literacy and consumer protection. In fact, digital consumer protection needs to be discussed extensively in this new age, where technologies are driving consumers' financial decisions. It is also predicted that financial self-efficacy adds to financial capability and helps to cope with the risks better (Serido et al., 2013). Also, financial confidence governs the translation of knowledge into behavior (Goyal & Kumar, 2020). It sustains the impact of such knowledge in financial decision-making and behavior (Morris et al., 2022).

This study focuses on understanding the interplay between digital financial literacy, digital consumer protection, financial self-efficacy, and financial confidence.