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A new study has revealed that cashless payments have irrevocably changed our purchasing behavior.
For over 3,000 years, cash has been our trusted companion. However, people in developed countries are increasingly moving away from physical money. Researchers believe this trend does not help individuals save their budgets more effectively. In fact, according to the new study, cashless payments encourage consumers to spend more.
To reach this conclusion, a team from the University of Adelaide and the University of Melbourne conducted a meta-analysis of over 70 previously published scientific articles. The authors examined the consumer habits of 11,000 participants from 17 countries around the world.
The researchers suggested that when we use a card or mobile phone at the checkout, we tend to monitor our budgets less strictly than when we pay with cash. This may be because, at that moment, we don’t always have a clear idea of how much money we are actually spending. “When using cash, people physically count and hand over bills and coins, making the spending process more noticeable,” said Dr. Lachlan Schomberg, the lead author of the study from the University of Adelaide.
“We recommend that consumers always carry cash instead of cards, as it acts as a method of self-control,” he added.
What Scientists Discovered
During the meta-analysis, researchers found that this effect is particularly pronounced when it comes to status purchases, such as luxury clothing or jewelry.
The team was also surprised to find that electronic payments are not associated with increased tipping or charitable donations.
A connection was also found between better economic conditions in a country and higher amounts of cashless transactions. The researchers noted that over time, the studied effect of cashless payments becomes weaker. The team suggested that as cashless payments become more common, they are less likely to mislead consumers. This habituation is likely to intensify with each step humanity takes toward a cashless society.
In the near future, scientists aim to expand their research on the latest spending trends and cutting-edge payment technologies, including cryptocurrency, as reported by Science Alert.
“The shift to a cashless society seems almost inevitable. I believe this research is crucial as it sheds light on an aspect of this transition that often goes unnoticed: how payment methods influence our purchasing behavior,” noted Dr. Schomberg. According to him, this understanding will help us make more informed decisions about our purchases.
The results of the study were published in the Journal of Retailing.
