ABSTRACTThe rapid development of financial technologies (fintech) has significantly transformed the Chinese financial industry, which practitioners and academics well recognise. This study investigates how innovative technologies influence firm dividend policies. Utilising data from Chinese‐listed firms spanning 2011–2022, we find a positive relationship between fintech development and firm cash‐dividend payments. The results remain robust across various tests, including difference‐in‐differences, regional exclusions, and alternative measures. Mechanism analysis reveals that fintech developments alleviate firms' financial constraints, thereby enhancing their capacity to distribute cash dividends. Our further analysis does not support the monitoring channel through which digital finance influences dividend policies. We find no significant impact of fintech on stock dividends and share repurchases, suggesting that fintech has less influence on flexible payout methods. Our study provides novel insights into understanding payout policies in the context of ongoing technological advancements in the financial sector.