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Do consumers pay more using debit cards than cash? An experiment
Abstract
We conduct an incentivized experiment to study the effect of the payment method on spending. We find that the willingness to pay is higher when subjects pay with debit cards compared to cash. The result is robust to controlling for cash-on-hand constraints, spending type, price familiarity and consumption habits of the products. The evidence thus suggests that different representations of money matters for consumer behavior. Such results further tease out the underlying mechanism of how payment methods influence spending behavior, which poses important implications for both consumers and merchants, as well as designing of digitalized payment in the future.
... There is a dearth of grounded techniques that are supported by quantitative validation. In the theoretically-grounded model, the potential inclusion of a moderation and mediation effect of the factors presents additional prospects for future research (Boateng et al., 2016;Hong, 2015;Runnemark et al., 2015). Therefore, the authors encourage junior researchers to develop models incorporating moderation and mediation effects. ...
... Extensive research is needed to figure out how users' perception of sustainable and green finance influences their willingness to adopt DFTs. Moderating role of some factors such as specific internet devices (Boateng et al., 2016), location (restaurant, rural-urban area, office, etc.) and day (holidays or working days) where the payment is carried out (Runnemark et al., 2015), culture (Takieddine and Sun, 2015) must be investigated in future research. ...
... Alalwan et al., 2016;Ben Mansour, 2016;Boateng et al., 2016;Chauhan et al., 2019;Chen and Liu, 2013;Giménez and Tamajón, 2019;Gu et al., 2009;Hartono et al., 2014;Hu et al., 2019;Johnson et al., 2018;Kim et al., 2010a;Koenig-Lewis et al., 2015;Koksal, 2016;K.-W. Lee et al., 2011;Liébana-Cabanillas et al., 2018;Liébana- Cabanillas et al., 2014b;Liébana-Cabanillas et al., 2013;Marakarkandy et al., 2017;McLean et al., 2020;Patel and Patel, 2018;Qu et al., 2018;Runnemark et al., 2015;Shaw, 2014;Sinha and Mukherjee, 2016;Siyal et al., 2019b;Tarhini et al., 2014;Teoh et al., 2013;Q. Yang et al., 2015;Zhou, 2011b) 30Compatibility (C)Compatibility refers to the situation in which customers perceive a product or service as relevant to their actions, ways of thinking and their lifestyle.(Al-Jabri ...
... There is a dearth of grounded techniques that are supported by quantitative validation. In the theoretically-grounded model, the potential inclusion of a moderation and mediation effect of the factors presents additional prospects for future research (Boateng et al., 2016;Hong, 2015;Runnemark et al., 2015). Therefore, the authors encourage junior researchers to develop models incorporating moderation and mediation effects. ...
... Extensive research is needed to figure out how users' perception of sustainable and green finance influences their willingness to adopt DFTs. Moderating role of some factors such as specific internet devices (Boateng et al., 2016), location (restaurant, rural-urban area, office, etc.) and day (holidays or working days) where the payment is carried out (Runnemark et al., 2015), culture (Takieddine and Sun, 2015) must be investigated in future research. ...
... Alalwan et al., 2016;Ben Mansour, 2016;Boateng et al., 2016;Chauhan et al., 2019;Chen and Liu, 2013;Giménez and Tamajón, 2019;Gu et al., 2009;Hartono et al., 2014;Hu et al., 2019;Johnson et al., 2018;Kim et al., 2010a;Koenig-Lewis et al., 2015;Koksal, 2016;K.-W. Lee et al., 2011;Liébana-Cabanillas et al., 2018;Liébana- Cabanillas et al., 2014b;Liébana-Cabanillas et al., 2013;Marakarkandy et al., 2017;McLean et al., 2020;Patel and Patel, 2018;Qu et al., 2018;Runnemark et al., 2015;Shaw, 2014;Sinha and Mukherjee, 2016;Siyal et al., 2019b;Tarhini et al., 2014;Teoh et al., 2013;Q. Yang et al., 2015;Zhou, 2011b) 30Compatibility (C)Compatibility refers to the situation in which customers perceive a product or service as relevant to their actions, ways of thinking and their lifestyle.(Al-Jabri ...
Systematic literature review (SLR) Future research agenda PRISMA A B S T R A C T This review synthesizes the prior literature on digital financial transactions (DFTs), identifies the factors that influence the adoption of DFTs, and sheds light on the research gaps in this area. This review focuses on the empirical studies published from 2009 to 2020. We identify fifteen factors that motivate the adoption of DFTs as well as five inhibitors to adoption. The literature lists perceived usefulness, perceived ease of use, compatibility, trust, security, effort expectancy, performance expectancy, and facilitating conditions as the most significant factors affecting the adoption of DFTs. In the study, cost of use, perceived danger, complexity, unwillingness to change, and privacy concerns are identified as major challenges to DFT adoption. Additionally, the paper outlines various research gaps in this field of research, particularly from the standpoint of methodology. The present work has significance for policymakers and managers in formulating policies and strategies to encourage the adoption of DFTs. As per the results, a research agenda for the future has been established.
... There is a dearth of grounded techniques that are supported by quantitative validation. In the theoretically-grounded model, the potential inclusion of a moderation and mediation effect of the factors presents additional prospects for future research (Boateng et al., 2016;Hong, 2015;Runnemark et al., 2015). Therefore, the authors encourage junior researchers to develop models incorporating moderation and mediation effects. ...
... Extensive research is needed to figure out how users' perception of sustainable and green finance influences their willingness to adopt DFTs. Moderating role of some factors such as specific internet devices (Boateng et al., 2016), location (restaurant, rural-urban area, office, etc.) and day (holidays or working days) where the payment is carried out (Runnemark et al., 2015), culture (Takieddine and Sun, 2015) must be investigated in future research. ...
... Alalwan et al., 2016;Ben Mansour, 2016;Boateng et al., 2016;Chauhan et al., 2019;Chen and Liu, 2013;Giménez and Tamajón, 2019;Gu et al., 2009;Hartono et al., 2014;Hu et al., 2019;Johnson et al., 2018;Kim et al., 2010a;Koenig-Lewis et al., 2015;Koksal, 2016;K.-W. Lee et al., 2011;Liébana-Cabanillas et al., 2018;Liébana- Cabanillas et al., 2014b;Liébana-Cabanillas et al., 2013;Marakarkandy et al., 2017;McLean et al., 2020;Patel and Patel, 2018;Qu et al., 2018;Runnemark et al., 2015;Shaw, 2014;Sinha and Mukherjee, 2016;Siyal et al., 2019b;Tarhini et al., 2014;Teoh et al., 2013;Q. Yang et al., 2015;Zhou, 2011b) 30Compatibility (C)Compatibility refers to the situation in which customers perceive a product or service as relevant to their actions, ways of thinking and their lifestyle.(Al-Jabri ...
This review synthesizes the prior literature on digital financial transactions (DFTs), identifies the factors that influence the adoption of DFTs, and sheds light on the research gaps in this area. This review focuses on the empirical studies published from 2009 to 2020. We identify fifteen factors that motivate the adoption of DFTs as well as five inhibitors to adoption. The literature lists perceived usefulness, perceived ease of use, compatibility, trust, security, effort expectancy, performance expectancy, and facilitating conditions as the most significant factors affecting the adoption of DFTs. In the study, cost of use, perceived danger, complexity, unwillingness to change, and privacy concerns are identified as major challenges to DFT adoption. Additionally, the paper outlines various research gaps in this field of research, particularly from the standpoint of methodology. The present work has significance for policymakers and managers in formulating policies and strategies to encourage the adoption of DFTs. As per the results, a research agenda for the future has been established.
... Previous studies have consistently highlighted the influence of payment format on people's willingness to pay (e.g., Feinberg, 1986;Liu et al., 2021;Prelec & Simester, 2001;Runnemark et al., 2015;Soman, 2003). Generally speaking, shoppers tend to spend more when they pay with cashless methods such as credit cards and mobile payments than with cash. ...
... The possible spending problem is, of course, not a new issue in the literature on cashless payment. A number of studies have already demonstrated that people tend to spend more when they make cashless payments, such as paying by credit or debit card, rather than when paying with cash (Feinberg, 1986;Hirschman, 1979;Liu & Chou, 2020;Park, Lee, et al., 2021;Prelec & Simester, 2001;Raghubir & Srivastava, 2008;Runnemark et al., 2015;Soman, 2001Soman, , 2003. ...
... Studies regarding payment transparency suggest that the salience of spending money induces a feeling of pain and thus negatively influences the willingness to spend and hence the actual amount purchased (e.g., Runnemark et al., 2015;Soman, 2003;Thomas et al., 2011). As an individual's behavioral system inhibits those behaviors that may lead to negative or painful outcomes (e.g., Carver & White, 1994), it was predicted that an increase in the awareness of spending would negatively influence the consumers' behavioral intention to pay via mobile payment. ...
We investigate whether the typeface used to display the purchase amount in the context of mobile payment influences consumers’ awareness of spending. The evidence suggests that prices displayed in angular (vs. round) typeface increase the awareness of spending in the context of mobile payment via the perceived harshness of the typeface and the experienced pain of payment (Studies 1-3, 5, and 6). Angular (vs. round) typeface also has downstream consequences for payment behavior, indicating that the amount displayed with the angular typeface increases the hesitation to press the “pay” button (Studies 2 and 6). Our results also demonstrate that the typeface effect on the awareness of spending is moderated by the purchase amount (Study 3). The robust typeface effect documented for Japanese participants (Studies 1-3) is not observed in North Americans (Studies 4 and 5), highlighting the role of culture. Finally, we replicate the price typeface effect (Studies 1-3) in a situation that is closer to the context of real mobile shopping and demonstrate that price typeface impact people’s willingness to spend on the next grocery shop (Study 6). Our research contributes to the scarce literature on addressing the the profligacy
issues associated with mobile payments and broadly cashless payments.
... Although riddled with challenges, the association between e-wallets and excessive spending has sparked great study interest among scholars (Khan and Craig-Less, 2009;Raghubir and Srivastava, 2008;Runnemark et al., 2015;Tee and Ong, 2016;Vojvodic and Matic, 2016). Existing literature supports the view that the payment instruments did affect spending behavior (Soman, 2001;Raghubir and Srivastava, 2008;Runnemark et al., 2015), challenging the standard economic theory assumption, which states that product valuation and payment instruments are independent (Runnemark et al., 2015). ...
... Although riddled with challenges, the association between e-wallets and excessive spending has sparked great study interest among scholars (Khan and Craig-Less, 2009;Raghubir and Srivastava, 2008;Runnemark et al., 2015;Tee and Ong, 2016;Vojvodic and Matic, 2016). Existing literature supports the view that the payment instruments did affect spending behavior (Soman, 2001;Raghubir and Srivastava, 2008;Runnemark et al., 2015), challenging the standard economic theory assumption, which states that product valuation and payment instruments are independent (Runnemark et al., 2015). However, prior research on mobile payment has been strongly criticized, as it had only focused on a few topics, with a limited accumulation of new knowledge and similar findings (Dahlberg et al., 2015). ...
... Although riddled with challenges, the association between e-wallets and excessive spending has sparked great study interest among scholars (Khan and Craig-Less, 2009;Raghubir and Srivastava, 2008;Runnemark et al., 2015;Tee and Ong, 2016;Vojvodic and Matic, 2016). Existing literature supports the view that the payment instruments did affect spending behavior (Soman, 2001;Raghubir and Srivastava, 2008;Runnemark et al., 2015), challenging the standard economic theory assumption, which states that product valuation and payment instruments are independent (Runnemark et al., 2015). However, prior research on mobile payment has been strongly criticized, as it had only focused on a few topics, with a limited accumulation of new knowledge and similar findings (Dahlberg et al., 2015). ...
Purpose
As it gains more popularity, e-wallets drive its users to spend more. Therefore, the purpose of this paper is to explore how and why e-wallets may encourage excessive spending behavior among young adult consumers.
Design/methodology/approach
An exploratory sequential or QUAL-QUANT design, combining qualitative and quantitative, is used in this study. It is a type of mixed-method design consisting of both the core and supplementary methods. The qualitative method is conducted in Study 1 using online focus group discussion to answer “why” and “how” questions, whereas the quantitative method is used in Study 2 to test or examine the hypothetical model. The questionnaires are extracted from focus group discussion in Study 1, which is further tested for validity and reliability and model estimation in Study 2. The model is evaluated using structural equation modeling.
Findings
Study 1 extracted four keywords to affect young adults spending behavior, easiness, promotions, self-control and perception of having more money (the illusion of liquidity). In Study 2, it is found that those four variables significantly affect spending behavior. Interestingly, it is also found in Study 2 that the illusion of liquidity mediates the relationship between self-control and spending behavior.
Research limitations/implications
During the COVID-19 pandemic, where a physical meeting is not encouraged, focus group discussion is conducted online via Zoom. Perhaps, this condition can be one limitation this study faced.
Originality/value
This study offers a theoretical contribution to the literature by exploring how and why e-wallet payment is connected to excessive spending behavior among young adult consumers. This study also provides a model that further explains the relationship between young adults’ spending behavior by adding the illusion of liquidity as the mediating variable.
... First, differences in the "physical immediacy" of payment-i.e., deviations from the physical exchange of cash-will have important consequences. As we have seen, even the simple move from paying with cash to paying with a debit card results, on average, in less reported pain of payment and increased spending [94]. Soetevent deploys a field experiment involving charitable giving to further examine the implications of debit rather than cash payments. ...
... How does the physical means of transacting affect purchase likelihood and associated brain function? [94][95][96] Temporal immediacy (e.g., immediate cash/debit vs. credit/financing payment; paying in advance vs. paying upon receipt of good or service) ...
Interest in the application of phygital marketing to retail commerce has increased in recent years. Implicit in this excitement is the notion that physical experiences provide unique value above and beyond what can be offered via digital means, and therefore that combining the two can galvanize sales. However, the specific sources of this marketing potential remain undertheorized and the factors determining the appropriateness of such implementations remain unclear. Based on an extensive review of relevant literatures, we begin by considering a particularly important poten-tial source of phygital marketing’s power. Specifically, we bring together findings from consumer psychology and neuroscience to provide a mechanistic account explaining how the combination of reduced “pain of payment””, facilitated by digital purchasing technologies, and the product attachment generated by real or simulated product experiences prior to purchase holds the po-tential to increase sales. We then propose a more general theoretical framework grounded on a review of primary and secondary research findings from consumer psychology and consumer neuroscience to explain the potential power of phygital marketing experiences, account for their unique value, and provide a platform for future research. The paper equips both academics and practitioners with a better and more scientific understanding of the practical dimensions of phygital commerce and lays a foundation for future enquiry.
... According to the United Nations, financial inclusion is a financial system that efficaciously and comprehensively serves all social groups and classes (Runnemark et al., 2015). Fungacova and Weill (2014) define financial inclusion as the dissemination of conventional financial services to a vast population and the access to and use of financial products and services. ...
... Unlike the classical economic thoughts, where consumers' valuation of goods and services are independent of the payment form or money representation, scholars find out the payment method itself does affect spending (Runnemark et al., 2015). Moreover, researches based on natural circumstances also provide similar patterns relating to spending behavior associated with different payment scenarios. ...
China, the second-largest economy in the world, has been an eye-catching destination for several foreigners who wish to live and study there. As they are beneficiaries of the Chinese advanced digital payment system, subjective security in using the mobile payment system and the subsequent change in their consumption intention has been a behavioral concern that perplexes scholars. Using SEM, we integrated the technology acceptance model (TAM) with two Subjective security Constructs (perceived confidentiality and perceived trustworthiness) to determine their impact on the system's adoption intention. At the same time, we evaluated the change in consumption intention using one factor (post-adoption consumption intention). A self-administered questionnaire based on prior literature was developed, and a total of samples of 260 foreigners who are extensive users of mobile payment were engaged. The study revealed that once again, TAM's model constructs (perceived usefulness and perceived ease of use) are dominant factors of adoption intention. While one of the subjective security constructs (perceived trustworthiness) was found to be a significant decisive determinant factor, the other one (perceive confidentiality) was found to be a negative but insignificant factor in mobile payment adoption intention among the expatriates. Moreover, this study provides insight into the digital payment system and its impact on influencing consumption intention beyond adoption.
... According to the United Nations, financial inclusion is a financial system that efficaciously and comprehensively serves all social groups and classes (Runnemark et al., 2015). Fungacova and Weill (2014) define financial inclusion as the dissemination of conventional financial services to a vast population and the access to and use of financial products and services. ...
... Unlike the classical economic thoughts, where consumers' valuation of goods and services are independent of the payment form or money representation, scholars find out the payment method itself does affect spending (Runnemark et al., 2015). Moreover, researches based on natural circumstances also provide similar patterns relating to spending behavior associated with different payment scenarios. ...
China, the second-largest economy in the world, has been an eye-catching destination for several foreigners who wish to live and study there. As they are beneficiaries of the Chinese advanced digital payment system, subjective security in using the mobile payment system and the subsequent change in their consumption intention has been a behavioral concern that perplexes scholars. Using SEM, we integrated the technology acceptance model (TAM) with two Subjective security Constructs (perceived confidentiality and perceived trustworthiness) to determine their impact on the system's adoption intention. At the same time, we evaluated the change in consumption intention using one factor (post-adoption consumption intention). A self-administered questionnaire based on prior literature was developed, and a total of samples of 260 foreigners who are extensive users of mobile payment were engaged. The study revealed that once again, TAM's model constructs (perceived usefulness and perceived ease of use) are dominant factors of adoption intention. While one of the subjective security constructs (perceived trustworthiness) was found to be a significant decisive determinant factor, the other one (perceive confidentiality) was found to be a negative but insignificant factor in mobile payment adoption intention among the expatriates. Moreover, this study provides insight into the digital payment system and its impact on influencing consumption intention beyond adoption.
... Moreover, with a few exceptions, such as consumer cheating behavior (Viglia, Tassiello, Gordon-Wilson, & Grazzini, 2019) and post-purchase product evaluations (Hoelzl, Pollai, & Kastner, 2011), previous research on payment formats has mainly looked at spending (e.g., Prelec & Simester, 2001;Runnemark, Hedman, & Xiao, 2015;Soman, 2003). For example, Soman (2003) found that compared with those who paid with cash, consumers who paid with a less transparent format (e.g., credit card) spend more. ...
... Different payment formats have different degrees of transparency (Soman, 2001(Soman, , 2003. For example, debit card payments are less transparent than cash payments (Runnemark et al., 2015). Previous research has found that single-or multi-function card payment transparency is lower than cash (Gafeeva, Hoelzl, & Roschk, 2018). ...
Payment formats have many important influences on consumer behavior. However, few studies have examined how the payment format affects hedonic consumption. This study explores how the transparency of the payment format (e.g., bonus points vs. cash) influences consumers’ willingness to pay, budget assignments, and consumption choices through differences in their perceived pain of purchasing (exchanging) hedonic and utilitarian options. Specifically, consumers who pay with highly transparent payment formats (e.g., cash), compared with consumers who pay with less transparent payment formats (e.g., store points, bonus points, and gift certificates), are willing to pay less, assign a lower budget, and are less likely to choose hedonic products. The perceived pain of purchasing (exchanging) a hedonic product plays an important mediating role on the influence of the payment format on hedonic consumption. However, the perceived pain of purchasing (exchanging) a utilitarian option plays a parallel mediating role only when people have paid for the less transparent payment format (e.g., buying store points) rather than when they accumulate the points through previous consumption events. The research findings provide insights that can benefit both theory and practice.
... In another study, researchers asked consumers in the parking lot of a grocery store for their receipts and payment method after they completed their purchase, and found that those paying by credit card paid on average 32% more than cash users, which was especially due to higher spending on flexible items such as treats and luxuries (Soman, 2003). Similar findings have been replicated in further research (Raghubir & Srivastava, 2008;Runnemark;Hedman, & Xiao, 2015). ...
... In another study, researchers asked consumers in the parking lot of a grocery store for their receipts and payment method after they completed their purchase, and found that those paying by credit card paid on average 32% more than cash users, which was especially due to higher spending on flexible items such as treats and luxuries (Soman, 2003). Similar findings have been replicated in further research (Raghubir & Srivastava, 2008;Runnemark;Hedman, & Xiao, 2015). ...
Credit card-related over-spending represents an important issue for consumers. Over-spending arises in parts from reduced payment transparency compared to cash and other payment methods. Additionally, week-by-week credit card spending exhibits high variance even on an intrapersonal level, which makes it hard to intuitively learn from prior transactions and control one's spending. As mobile-mediated information systems have been proven effective in delivering behavior change interventions, this study investigates the efficacy of using a novel smartphone application that increases the salience of credit card transactions to help consumers control their cashless payments better and ultimately spend less. We implemented a goal-setting feature and provided weekly goal attainment feedback highlighting ordinary, exceptional, or both types of purchases. This work was conducted as a field experiment, studying a large sample of credit card consumers in the wild over several months, which yielded a significant reduction in spending with unobtrusive interventions. It further highlights the importance of including exceptional purchases in households' spending budgets and discusses how people adjusted their consumption to lower their expenditures.
... That is, "the less transparent the payment is (the less the payer feels the outflow of money), the less painful it is to pay" (Runnemark et al., 2015, p. 286). Less salient payment methods (e.g., debit cards, credit cards, digital wallets, etc.), compared to more tangible payment methods (e.g., notes and coins), can lead to unintended consequences for consumers including overspending, a higher willingness to pay, and increased unhealthy food consumption (Agarwal et al., 2019;Boden et al., 2020;Ceravolo et al., 2019;Chatterjee & Rose, 2012;Mazar et al., 2016;Meyll & Walter, 2019;Park et al., 2021;Raghubir & Srivastava, 2008;Runnemark et al., 2015;Vandoros, 2013). ...
Payment providers in the gambling industry facilitate the transfer of money to and from gamblers’ wagering accounts. Payments transaction data is information captured from these transactions, such as the type, amount, time, and location. There is significant stakeholder interest in how technology-assisted payments may affect potential gambling harms, but research using actual payments transaction data is rare. This study considers the utility of payments transaction data in distinguishing subgroups of gamblers, and exploring potential markers of harm in gambling payments transactions. We benchmarked six cluster analysis methods using a dataset of 2286 online casino gamblers obtained from a U.S. gambling digital payments provider. The k-means algorithm with five centers was the optimal method. Two large clusters contained the majority of the dataset (87.9%) and characterized customers at a low risk of harm. Three smaller clusters comprised profiles of customers at a potential risk of harm – a high deposit-to-withdrawal ratio (8.4%), high activity, high intensity (2.5%), and high volume, high variability (1.2%). Our results establish the use of payments transaction data for identifying subgroups of gamblers, including potential risk groups that provide preliminary insights into payment behavioral markers of gambling harm.
... Pada penggunaan data primer, e-money meningkatkan konsumsi masyarakat di Aceh (Khairi & Gunawan, 2019), masyarakat di kota Denpasar (Aksami & Jember, 2019), dan mahasiswa kota Malang (Ramadani, 2016). Demikian pula, Runnemark et al (2015) mengungkap bahwa mekanisme metode pembayaran memengaruhi perilaku belanja, yang menimbulkan implikasi penting bagi konsumen dan pedagang, sehingga kesediaan untuk membayar lebih tinggi ketika masyarakat membayar dengan kartu non-tunai dibandingkan dengan uang tunai. ...
Purpose – To examine the effect of the pandemic on changes in the number and value of e-money transactions on real money demand. Methods – Auto Regressive Distributed Lag (ARDL) time series regression. Findings – The number of e-money transactions and transaction value affect the increase in real money demand, but the number of credit card transactions reduces it in the short and long run. The pandemic effect does not increase the number of e-money transactions in the short and long term, while the pandemic effect increases the value of e-money transactions although it is temporary. Implication – Monetary authorities increase the distribution or the equalization of support facilities for e-money payment recipients, as well as the ease and security of using e-money. Originality – ARDL model analysis shows that the pandemic effect increases real money demand in both the short and long term by increasing the value of e-money transactions, while the monthly effect affects in the short term. The pandemic effect on increasing the value of e-money usage is temporary. Abstrak Tujuan – Mengkaji efek pandemic terhadap perubahan jumlah transaksi dan nilai transaksi penggunaan e-money dalam mempengaruhi permintaan uang riil Metode – Auto Regressive Distributed Lag (ARDL) time series regression Temuan – Besaran jumlah transaksi e-money dan nilai transaksi mempengaruhi peningkatan permintaan uang riil, namun jumlah transaksi kartu kredit menurunkan permintaan uang riil dalam jangka pendek dan panjang. Efek pandemic tidak meningkatkan jumlah transaksi e-money dalam jangka pendek dan panjang, sedangkan efek pandemi meningkatkan nilai transaksi e-money meskipun bersifat sementara. Implikasi – Otoritas moneter meningkatkan penyebaran atau pemerataan fasilitas pendukung penerima pembayaran e-money, dan kemudahan dan keamanan menggunakan e-money. Orisinalitas – Dengan menggunakan analisis model ARDL, efek pandemi meningkatkan permintaan uang riil melalui peningkatan nilai transaksi e-money dalam jangka pendek dan panjang, sedangkan efek bulanan mempengaruhi permintaan uang riil jangka pendek. Efek pandemic terhadap peningkatan nilai penggunaan e-money bersifat sementara.
... Nowadays, innovative transaction channels, including the banking system, are necessary. Payment method choice depends on the characteristics of the transaction, such as the payment Business and Economic Research ISSN 2162-4860 2023 amount or the store where the transaction is conducted, on the characteristics of the payment method, such as its acceptance and transparency, and even on the individual's factors (Soman, 2003;Arango et al., 2011;Runnemark et al., 2015). These personal factors refer to behavioral elements such as culture, compulsive behavior, and materialism, sense of ownership, mostly in purchases with cash, and could even influence the type of goods purchased (Medina et al., 1996;Chatterjee & Rose, 2012;Kamleitner & Erki, 2013;Anysiadou, 2022). ...
Purpose: The study aimed to investigate Greek consumers' attitudes and actual behavior toward virtual bank cards and to show whether Experimental Economics can incentivize these banking products.Methodology: For data collection, a specially designed experiment was conducted among Greek consumer samples according to Experimental Economics and Nudging Theory principles. Econometric analysis was conducted through Multi-level Models and Bivariate statistical tests.Results: Results suggest that demographic characteristics such as age combined with personalization and consumer risk perception play an important role in virtual bank card adoption. The youngest consumers are optimistic about their use, while the oldest are negative. Furthermore, Experimental Economics and Nudging Theory could identify behavioral changes.Novelty: The study's novelty and uniqueness are based on investigating Greek consumers' attitudes and behavior towards new and innovative banking products, which still need to be well known. The research methodology is also a groundbreaking feature of the study, as Experimental Economics is the most appropriate method to study human behavior and its unconscious influencing factors that cannot be studied in other ways.
... Menurut (Runnemark, 2015) Individu akan cenderung mneghabiskan uang lebih banyak jika bertransaksi menggunakan e-money dibanding dengan uang cash. Oleh karena itu, pengeluaran dengan uang cash dapat lebih terkontrol daripada menggunakan e-money. ...
Pengaruh perilaku konsumtif mahasiswa dipengaruhi oleh beberapa faktor. Dalam penelitian ini faktor yang diduga mempengaruhi perilaku konsumtif adalah penggunaan e-money dan kontrol diri. Tujuan penelitian ini adalah untuk mengetahui pengaruh e-money terhadap perilaku konsumtif dengan kontrol diri sebagai variabel intervening pada mahasiswa Fakultas Syariah dan Ekonomi Islam (FSEI) Institut Agama Islam Negeri (IAIN) Syekh Nurjati Cirebon. Subjek penelitian ini adalah Mahasiswa Fakultas Syariah dan Ekonomi Islam (FSEI) Institut Agama Islam Negeri (IAIN) Syekh Nurjati Cirebon. Populasi dalam penelitian ini berjumlah 3.539 mahasiswa. Jumlah sampel dalam penelitian ini adalah 97 mahasiswa dihitung dengan rumus slovin dengan taraf kesalahan 10%. Metode analisis data yang digunakan adalah regresi linier berganda menggunakan spss versi 22. Hasil penelitian ini menunjukkan bahwa e-money berpengaruh terhadap perilaku konsumtif, e-money berpengaruh terhadap kontrol diri, kontrol diri tidak berpengaruh terhadap perilaku konsumtif dan kontrol diri mampu memediasi antara e-money dan perilaku konsumtif pada Mahasiswa Faklultas Syariah dan Ekonomi Islam (FSEI) Instutut Agama Islam Negeri (IAIN) Syekh Nurjati Cirebon.
... Marcum, Higgins, and Nicholson 2016), because of their competencies to utilize novel technologies (e.g. Runnemark, Hedman, and Xiao 2015), and thus have been preferred in similar prior studies (e.g. Talwar et al. 2020). ...
Use of wearable technology for personal healthcare management is envisioned to play an instrumental role in promoting social sustainability by ensuring good health and wellbeing of all. Despite the upward market trend in purchase of wearable technology devices, their usage for personal healthcare remains a concern. An integrated model based on herd behaviour, theory of homophily and tenets of uncertainties drawn from initial trust theory is proposed and tested to examine the role of online reviews on herding of wearable technology adoption for personal healthcare management. A survey was administered on 434 wearable technology users, and data was analysed using Partial Least Square Structural Equation Modeling (PLS-SEM) with Smart PLS. The structural path analysis indicates that observing the online reviews written by homophilous users as well as uncertainties related to personal propensity and firm reputation positively influence individuals’ herding in wearable technology adoption for personal healthcare. The present research contributes to emerging literature on the role of online reviews on herding in wearable technology adoption for attaining social sustainability. The results of this study can be used by practitioners for designing strategies that facilitates consumption and usage of wearable technologies for personal healthcare management.
... Prelec dan Loewenstein (dalam Runnemark, Hedman, & Xiao, 2015) mengemukakan konsep "the pain of paying" yaitu, individu akan menghabiskan lebih banyak uang dengan sistem emoney dibandingkan uang tunai. Individu akan lebih merasakan kehilangan uang saat memilah secara langsung uang tunai. ...
Penelitian ini ditujukan untuk memahami hubungan antara self-control dengan perilaku konsumtif pengguna e-money mahasiswa Fakultas Psikologi Universitas Diponegoro. Self-control merupakan kemampuan individu untuk mengatur serta mengendalikan perilaku dari dalam diri yang tidak diinginkan sehingga mampu menahan tingkah laku impulsif dan mengarahkan kepada konsekuensi positif Perilaku konsumtif merupakan dorongan membeli suatu barang secara berlebihan tanpa pertimbangan yang rasional dan hanya berdasarkan pada keinginan sesaat. Populasi penelitian ini berjumlah 498 mahasiswa Fakultas Psikologi Universitas Diponegoro dengan sampel 221 orang. Teknik penentuan sampel yang digunakan dalam penelitian ini adalah convenience sampling. Alat ukur yang digunakan adalah Skala Self-Control (29 aitem, α = 0,93) dan Skala Perilaku Konsumtif (33 aitem α = 0,94). Analisis data menggunakan analisis regresi sederhana menunjukkan nilai rxy = -0,869 dan p = 0,000 (p < 0,05). Hasil penelitian terdapat hubungan negatif antara self-control dengan perilaku konsumtif pada mahasiswa Fakultas Psikologi Universitas Diponegoro. Self-Control memberikan sumbangan efektif sebesar 68,9% dalam memprediksi perilaku konsumtif, sisanya sebesar 31,3% dipengaruhi oleh faktor lain yang tidak diungkap dalam penelitian ini.
... Nakit ödeme, harcamaları kontrol etmeyi elektronik ödemeye göre daha kolay hale getirmektedir. Bu nedenle tutumlu tüketiciler harcamalarını kontrol etmek için nakit ödeme yapmayı tercih edeceklerdir (Runnemark, Hedman, & Xiao, 2015). Öte yandan Trütsch (2014), elektronik para ödeme sistemlerinin benimsenmesinin tüketici harcamalarının artmasına yol açtığını ortaya koyan bir çalışma yapmıştır. ...
Gelişen teknoloji, hayatın her alanında olduğu gibi ekonomik faaliyetlerde de kendini göstermektedir. Zamanın artan marjinal maliyeti, birçok konuda olduğu gibi ekonomik faaliyetlerin de hızlı bir şekilde tamamlanmasını gerekli kılmaktadır. Tüketicilerin günümüzde iktisadi faaliyetler sırasında sergiledikleri davranışlarının anlaşılmasında elektronik para konusundaki tutumlarının da anlaşılması büyük önem arz etmektedir. Çalışmamızda, Türkiye’de elektronik para uygulamalarının bireyler nezdindeki durumunun, elektronik parayla ilgili tutumlarının ve bireylerin elektronik para kullanımına ilişkin yaklaşımlarının Teknoloji Kabul Modeli (TKM) çerçevesinde incelenmesi amaçlanmıştır. Çalışmanın örneklemi İstanbul’da yaşayan yüksek lisans ve üstü eğitim düzeyine sahip, e-para konusunda bilgili ve finans sektöründe faaliyet gösteren şirketlerde çalışan 165 bireydir. Çalışma korelasyon analizi, yol analizi, hipotez testleri ve R² analizleri uygulanarak, kurulan hipotezlerin desteklendiği görülmüştür. Çalışma sonucunda elde edilen bulgularda TKM çerçevesinde e-para uygulamalarına ilişkin algılanan kullanım kolaylığının, bireylerin elde edecekleri fayda algılarını ve kullanma niyetlerini pozitif bir şekilde etkilediği tespit edilmiştir. Bireylerin kullanma niyetlerini etkileyen bir diğer faktör algıladıkları fayda olarak belirlenmiştir.
ABSTRACT
Technological developments manifest themselves in economic activities as well as in all areas of life. The ever-increasing marginal cost of time necessitates the rapid completion of economic activities, as with many other issues. Understanding consumers’ attitudes toward e-money is greatly important for being able to understand the behaviors exhibited during today’s economic activities because almost every area of life has become digital now, and many transactions
have started being carried out by methods other than physical money. This study aims to examine the status of
e-money applications in Turkey, individuals’ attitudes toward e-money there, and their approaches to using it within
the framework of the technology acceptance model (TAM). Within the framework of the research, a survey study has
been carried out with the participation of 165 people residing in Istanbul who have a master’s degree education level or
higher, who are knowledgeable about e-money, and who work in companies operating in the finance sector. The data
obtained from the surveys revealed results by respectively completing reliability and validity analyses and by applying
correlation and path analyses, forming hypotheses, and conducting R² analyses. The study results have determined
the perceived ease-of-use regarding e-money applications, especially within the framework of TAM, to positively affect
individuals’ perceptions regarding its benefits and their intentions to use it. Perceived benefit is also another factor that
was found to affect individuals’ intentions to use e-money.
... We would expect that endowment effects are larger when participants can physically hold the money. We believe our results are relevant to most experimental settings since participants make decisions in anticipation of payment at the end of the session. 2 The literature that examines whether form of payment affects willingness to spend or save money finds mixed evidence (Bushong, King, Camerer, and Rangel, 2010;Reinstein and Riener, 2012;Runnemark, Hedman, and Xiao, 2015;Spantig, 2021;Luccasen III and Grossman, 2018;Mishra, Mishra, and Nayakankuppam, 2006;Svirsky, 2014). There is also some evidence that there are differences in behavior with payment in cash versus virtual experimental currency in laboratory experiments (Reinstein and Riener, 2012;Shen and Takahashi, 2017;Wadhwa and Zhang, 2015). ...
We use an experiment to examine whether form of payment (cash or mobile money) affects estimates of intertemporal choice and risk taking. We find that form of payment does not affect temporal discounting and risk taking. Given that participants prefer payment via mobile money, the results suggest that there are minimal concerns with using mobile money to pay participants in experimental studies.
... Various studies have confirmed that electronic payment can lead to significant underestimation of the amount of money spent, compared to cash payments, as well as enhanced willingness to spend money. Enhanced spending when using a credit cards, for example, is well documented in several studies (Kamleitner and Erki, 2013;Prelec and Simester, 2001;Runnemark et al., 2015). Feinberg (1986) explained the enhanced spending effect when using a credit card by learning through condition. ...
Purpose
Buying behavior has been significantly altered by technological developments as a result of the rise of the Internet. Online buying behavior is also inextricably linked to electronic payment systems, such as credit cards. This paper investigates how credit-card systems and online shopping increases compulsive buying of female and male consumers.
Design/methodology/approach
In the current study, the authors tested the influence of credit card possession and the role of Internet shopping on gender differences in compulsive buying in a representative German sample ( n = 1,038). Binary logistic regression analysis and moderator analysis were applied.
Findings
As predicted, Internet shopping increased compulsive buying, but the association was the same for females and males. Further, credit card possession moderated the effect of gender on compulsive buying, with females showing a higher proneness to compulsive buying.
Originality/value
This research, which is based on a representative population study, contributes to the understanding of the role of credit cards and the one of online shopping in developing compulsive buying patterns among female and male consumers.
... Studies have shown that consumers spend more when using less transparent payment methods. Several studies have compared the use of credit cards or debit cards to cash (Feinberg, 1986;Hirschman, 1979;Runnemark et al., 2015), where card users have been found to spend more than people paying with cash. To explain the credit card premium, Zellermayer (1996) coined the term "pain of paying", as the feeling consumers encounter when paying. ...
The purpose of this study is to test the notion that the use of digital payment methods, such as paying with a mobile phone, increases the risk of financial vulnerability. Research from the USA indicates such a relationship, and we study whether this finding can be generalized to other countries. Motivated by recent changes in EU legislation related to financial transactions, we also examine willingness to use social media companies for money transfers along with sharing bank account information with third-party financial services. Exploiting data collected from a representative sample of the Norwegian adult population (n = 2202), we identify differences in financial behaviour and characteristics between users and nonusers of different digital payment methods. In contrast to US studies, we find that mobile payment users were less financially vulnerable than nonusers and those women were more likely users of digital payment technologies than men. Younger generations and those with low financial literacy were more financially vulnerable than others, although we did not find this to be related to the use of mobile payment or other digital payment methods. The results show that there is a need for more research from different countries outside of the USA to obtain an understanding of the consequences of increased digitalization of financial services. In addition, as COVID-19 has shifted a vast amount of spending online and these newer payment technologies have become more available, we need to gain a better understanding of how they influence financial behaviour.
... Consequently, cashless payments may exacerbate self-control problems and foster impulsive buying. There is evidence that the willingness to pay is higher among individuals paying with debit cards (Runnemark et al., 2015) and credit cards (Prelec & Simester, 2001) compared to cash, and that cash payments are associated with lower levels of impulsive buying compared to debit cards (van der Horst & Matthijsen, 2016). The emerging literature on the impact of mobile payments on consumer behavior shows that the separation of the physical act of paying with an electronic device from the act of consumption also increases the willingness to pay (Liu et al., 2020). ...
The global digital shift, recently accelerated by the COVID-19 pandemic, requires that consumers have knowledge allowing them to navigate increasingly cashless markets safely and effectively. To enable valid and reliable measurement of such knowledge, we used data obtained from a random sample of adult Poles to develop and evaluate the psychometric properties and applicability of an original cashless payments knowledge scale (CPK scale). Our analyses based on Item Response Theory show that some evident subdomains exist within the CPK construct. The separate dimensions of the CPK merge into a coherent scale with solid psychometric properties. We find that the CPK score depends on the place of residence, education, and household size, and is positively related to safe cashless behavior. Our findings may have important implications for financial institutions as well as policymakers interested in segmenting consumers in terms of their financial knowledge, potential risks resulting from deficits in this knowledge, and enhancing financial literacy.
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... (Achrol and Kotler, 1999) [22] We found that cash payments are more familiar than using a credit card. it is done by the type of expenditure, price familiarity and buying and selling habits [23]. Although credit cards have many benefits, the problem for cardholders is how to direct finance [24] d. ...
We propose a credit card application using blockchain to improve the approval, transparency and security process. Some studies explain the use of blockchain technology in credit card applications but have not described the concept and architecture. Therefore, this study describes and describes the architecture of using credit cards for credit card applications. The motivation of this research is to explain the implementation of blockchain technology, especially the decentralization process of ledgers in credit card applications. Next, we propose architecture and algorithms for credit card applications using blockchain. The conclusion in this study is a decentralized ledger for credit card applications that allows peer-to-peer transactions, decentralized credit card applications that are not bound by geographical boundaries, have two advantages for debtors and the banking industry. In addition, the architecture is made using a credit card for application credit cards and an explanation of how the architecture works.
... Many of the more recent articles have mobile payment platforms in focus, while earlier work focused on payment card networks. In addition, differences in consumer spending using different payment mediums and temporal separation of payment and consumption have attracted interest throughout the payment and retail literature (Greenacre & Akbar, 2019;Hirschman, 1979;Prelec & Loewenstein, 1998;Runnemark, Hedman, & Xiao, 2015). With a constant change and an increase of new payment services and possibilities to pay online, research calls for more holistic and general theories of behavior and operations (de Luna, Liébana-Cabanillas, Sánchez-Fernández, & Muñoz-Leiva, 2019;Galipoglu, Kotzab, Teller, Yumurtaci Hüseyinoglu, & Pöppelbuß, 2018). ...
This chapter visits some of the fundamental concepts from platform economics, network effects, and network externalities. Further on, it discusses definitions of two-sided and multi-sided markets, how they are treated as business models. These concepts are further compared to the concept service ecosystem. A case of a payment service provider whose business model contributes to the growth of e-commerce is included. The purpose is to tease out how research on platforms has developed since e-commerce was in its infancy. The fundamental concepts developed in network economics are still valid and have been translated into different fields with a focus on value creation, information, and interaction. How platforms within platforms spur each other's growth is an area that has the potential to reach new insights on the platform economy.
... It is even more used in certain countries, such as the U.S. in share of payment usage (Kumar and O'Brien, 2019). Research findings of (Runnemark, Hedman and Xiao, 2015) show that the form of the underlying payment instrument is important for willingness to pay for identical products, and consumers tend to pay more often with debits. Nevertheless, in the same study, participants were given the option to pay with PayPal, but no difference was observed in the willingness for payment due to earmarking effect. ...
Digitalization of money has accelerated with the initiative of the private sector to issue digital money. This thesis aspires to present potential changes to the monetary system due to the ongoing digital revolution, and the phasing out of cash. Digitalization, denationalization and competition of money were supported by economists in the last century, and have become a key issue, so a comprehensive literature review was conducted on money, the monetary system and the recent developments towards digitalization and de-cashing, in order to achieve the goal of understanding progress in this area. The results suggest that private currencies issued by social networking platforms may shift the current financial service organization, countries open to large digital networks may be vulnerable to digital dollarization, the direct, and the hybrid central bank digital currency (CBDC) models under discussion may be disruptive for fractional reserve banking. The independence of the central bank may be put at risk due to loss of solvency, but the central bank's ability to invigorate the economy may increase with the elimination of the zero lower bound constraint under the existing terms and conditions. However, as might be expected, shifts in money and payment systems, the decisions to be taken by the authorities, and the steps to be taken by other economic actors should be monitored closely in an attempt to gain a clear overall understanding.
... Besides, if consumers already feel trust when using electronic transactions, it can create confidence that this system aligns with what is expected (Runnemark et al., 2015). Therefore, consumers are considered to be able to make rational decisions on what to make. ...
Research aims: This study is intended to determine the influence of perceived security and trust on the decision to use digital payment systems during the COVID-19 pandemic.Design/Methodology/Approach: The type of data used in this study was primary data, which was collected using an online survey. Sample used in this study determined by purposive sampling method. The information collected was handled and analyzed using SEM-PLS.Research findings: This study shows the results that the presence of technical protection explicitly affects the perception of security and trust significantly. In addition, security also greatly affects an individual's confidence in the use of digital payment systems. However, of the various findings made in this study, trust is the only one that influences the choice in using EPS.Theoretical contribution/Originality: During this pandemic Covid-19, limited studies talk about consumers’ perceptions instead of technical protection of digital payment in detail. Meanwhile, consumers' security is the thing that needs to be studied further to create a comprehensive study result.Practitioner/Policy implication: Results of this study give some implications for the EPS providers to complete and develop a secure EPS system for users, especially in this pandemic era when the EPS users increase and people’s mobility is restricted in some areas.Research limitation/Implication: The implication of this research is to emphasize the importance of one's knowledge regarding risks when using an electronic payment system. It is because the use of EPS in the pandemic era is unavoidable. Therefore, not only providers must improve their security systems, but users must also be aware of the EPS risks and security. Nevertheless, the limitation of this study is that it only used samples in Indonesia; maybe the results will be different when applied in other countries with better EPS security systems.
... Existing studies on payment method focus on two main areas: factors affecting consumers' adoption of the mobile payment from psychological perspectives and the comparisons between cash and credit card (Feinberg, 1986;Runnemark et al., 2015;Thomas et al., 2011). 1 Although credit card and the mobile payment share the same cashless feature, they differ in many ways in terms of technology and user experience. However, studies focus on the mobile payment is still limited with a few exceptions (Falk et al., 2016;Xue and Lin, 2019;Boden et al., 2020;Liu et al., 2020). 2 Recent research regarding mobile payment methods extends the scope to more specific facets of its advantages in adoption compared with other methods. ...
The mobile payment technology has converted many of our face-to-face transactions virtual. With the advance of smart devices and financial technologies in place and the shock of COVID-19, economic transactions involving mobile payments are becoming increasingly preferred globally. For instance, using a mobile to purchase goods is faster, more hygiene and private than cash payment. However, empirical evidence is scarce for whether people would react differently when they are paid with mobile or cash. In this paper, we aim to fill this gap. In particular, we examine whether cash and mobile payment methods have an impact on prosocial decisions and risk attitudes using standard laboratory games in China. In dictator, ultimatum games as well as the conventional Holt and Laury (2002) risk assessment, we find significant payment effects that people are more generous when they are using the mobile payment method compared to cash; while we find an insignificant payment effect in risk attitude. (JEL: C91, D81, D91, O33)
... Cash payment makes it easier to control spending than electronic payment. Thus, frugal consumers would prefer to make payment with cash in order to control their spending (Runnemark, Hedman and Xiao, 2015). On the other hand, Trütsch (2014) has shown that the adoption of electronic money payment systems has led to increased consumer spending. ...
This study examines how e-money usage affects consumer spending behaviour through discrete choice analysis considering demographic characteristics. It also assesses people’s attitudes towards the challenges and benefits of using e-money through ANOVA. Our analyses indicate that e-money significantly impacts consumer spending behaviour, with the type of e-money and the expenditure made with e-money both influencing the consumers’ expenditures. Gender, age, and employment status also affected consumers’ spending behaviour as expected. However, the length of e-money usage had no effect. Interestingly, the respondents’ challenges associated with using e-money had no significant effect on the frequency of e-money usage. On the contrary, the derived benefits of using e-money had significant effects. JEL classification numbers: C25, D12, E42. Keywords: Electronic money, Consumer behaviour, Discrete choice, Ordered logit.
... The 'must take' motive captures the concern that business may be lost to competitors accepting cashless payments or reduced due to limitations imposed on customers by cash. Such limitations, which can lead to outright resignation from shopping, include budgetary constraints due to fixed cash holdings or liquidity constraints that could be circumvented by the use of credit cards(Chakravorti and To, 2007;Bourguignon, Gomes and Tirole, 2014;Runnemark, Hedman and Xiao, 2015). On the other side of the market, a rise in the number of merchants adopting cashless payment technologies and the consequent growth in cashless transaction volume imply augmentation of acquirers' revenues.Just in the US, revenues from handling transactions and associated services rose from $18.7 billion in 2017 to $23.7 billion in 2019(McKinsey & Company, 2020c).3. ...
Using a survey of 5,504 respondents from 22 European countries, we examine preferences regarding cash and cashless payments at the point of sale (POS) during the COVID-19 crisis. Consumers favor cashless transactions when they believe that handling cash presents a higher risk of infection. Moreover, the habits they develop during periods of restrictions and lockdowns appear to further diminish their appetite for transacting in cash. Not only do these factors affect current choice of payment method, but also influence declared future intentions to move away from cash after the pandemic is over.
... Several scholars have focused on the impact of cash and card payments on consumer behavior (Mishra, Mishra, & Nayakankuppam, 2006;Shimp & Moody, 2000;Soman, 2003;Thomas et al., 2011), especially on the WTP (Chatterjee & Rose, 2012;Feinberg, 1986;Gafeeva, Hoelzl, & Roschk, 2018;Moore & Taylor, 2011;Prelec & Loewenstein, 1998;Prelec & Simester, 2001;Raghubir & Srivastava, 2008;Runnemark, Hedman, & Xiao, 2015;Zellermayer, 1996). Specifically, comparing card payments, people were more sensitive to the price and willing to pay less for the same product when using cash payments. ...
With the advancement of technology and diversification of payment methods, mobile payment methods have gradually replaced traditional cash payments and become the mainstream payment mode. Although mobile payment is more convenient, is it faster than cash payment when their physical differences are controlled? Does it affect consumer behavior? We designed two studies to explore these questions. In Study 1, we required 192 participants to physically pay by cash or mobile phone and measured their willingness to pay (WTP). In Study 2, we compared the speed of the two payment methods when the physical differences between them were eliminated and measured consumers' willingness to buy from 46 students. Our results indicated that the effect of mobile payment, which increases WTP, also applies to specific products, and it does not occur if the money is a gift, as opposed to if it is earned. Moreover, when the process of cash payment is made as easy as mobile payment, people still spend less time on mobile payments than cash payment, and mobile payment effect is impacted by payment time. The above results supplement the evidence that payment methods have an impact on consumer behavior, and provide consumers, merchants, and regional managers with suggestions on payment methods.
... Confidence in payment through the Internet has gradually increased; in some cases, even with monthly automatic debit (in the case of electricity or telephone service) or through Web purchases in low-cost companies. Runnemark, Hedman, and Xiao (2015) found that consumer spends more when paying with a credit card, as compared with paying cash. One reason paying with a credit card is a less visible "loss" because of the payment delay till the end of the month. ...
Globally, the financial behavior of consumer is very relevant for companies, governments, and of course the consumers themselves. Major problem currently is the lack of sufficient knowledge among consumers about financial planning, known as financial literacy. Lack of such knowledge leads families and citizens to opt for wrong decisions that are financially expensive, resulting in increased debt load and depletion of retirement funds.
This study investigates the relationship between travelers’ generativity, prosocial attitudes, consumption values, and food waste avoidance behavior. We develop a theoretical model based on the motivation-opportunity-ability theory and tested it using data collected from a sample of Generation Z (n = 389) and older travelers (n = 262) to Delhi, India. Partial-least-squares structural equation model analysis is used as the data analytic tool. The findings indicate that Generation Z travelers report a higher level of generative concerns, prosocial attitudes, and green consumption values, and are more likely to engage in food waste avoidance behavior than older travelers. Generativity and prosocial attitudes are significantly associated with food waste avoidance behavior for Generation Z travelers only. The relationship between consumption values and food waste avoidance behavior is significant for both samples of travelers. Prosocial attitudes and consumption values mediate the relationship between generativity and food waste avoidance behavior. We present the theoretical, practical, and limitations of the study.
У статті проаналізовано кількісні та якісні зміни на ринку платіжних інструментів, головне місце в якому належить платіжним карткам банків в умовах, коли цифровізація економіки визначає головні тренди розвитку не лише фінансового сектора, але й усіх аспектів життєдіяльності людини. Обґрунтовано фактори, що зумовлюють стратегічне значення ринку платіжних карток для стимулювання економіки та рівня життя суспільства.
Визначено сучасні тенденції розвитку фінансового ринку в Україні, які свідчать, що платіжні картки як ключовий інструмент віддаленого доступу до банківських рахунків є головним рушієм розвитку безготівкових платіжних операцій та просування інституційних засад грошового обігу в бік усе більшого зростання його безготівкової складової, що відображає запит суспільства на здешевлення, прискорення й поліпшення розрахунків. Глобальні процеси щодо побудови економічних відносин на основі цифрової трансформації роблять цей тренд незворотнім.
Проаналізовано динаміку основних кількісних параметрів функціонування ринку платіжних карток в Україні за останні п’ять років, що вказують на його активний якісний розвиток і наявність стійких тенденцій до зростання. Водночас, незважаючи на те, що з розвитком інформаційних технологій банками впроваджуються нові сервіси й форми обслуговування за допомогою платіжних карток, у статті відзначено і певні проблеми подальшого розвитку цього ринку, що пов’язано з усе ще існуючими конкурентними перевагами використання готівки, а також окремими інституційними труднощами функціонування банківського сектора.
Research background: The COVID-19 pandemic has changed consumer preferences and their use of banking services. Consequently, the propensity of bank customers to use electronic banking has increased. Banks, in order to meet customer expectations, develop and improve the most popular channels of distribution of their services, offering increasingly advanced technological solutions that provide the customer with a high level of security.
Purpose: The aim of this paper is to analyze and evaluate the functioning of electronic banking in PKO Bank Polski in the era of the SARS-CoV-2 coronavirus pandemic.
Research methodology: The current situation regarding the functioning of e-banking in Poland in the era of the pandemic with particular emphasis on the development of electronic banking services at Bank PKO Bank Polski was investigated. Development trend models were used for the study, and then applied to forecast the changes that will occur in the electronic banking market in Bank PKO Bank Polski at the end of 2022 and in 2023. The analysis was carried out using the STATISTICA 13.3 program.
Results: Banks, including PKO Bank Polski, will increasingly need to develop their digital infrastructure and continue to innovate to keep up with changing lifestyles. In the future, the use of cash will be marginalized in favour of electronic payments.
Novelty: Further IT and telecommunication progress at PKO BP Bank Polski will result in the emergence of more innovative solutions for banking services and, at the same time, the development of the electronic money market.
The introduction of new payment methods has resulted in one of the most significant changes in the way we consume goods and services. In this paper, I present results of a field and a laboratory experiment designed to determine the effect of payment method (cash vs. mobile payment) on spending, and a meta-analysis of previous literature about payment method effect. In the field experiment, I collected cashier receipts from Chinese supermarkets. Compared to cash payment, mobile payments significantly increased the amount purchased and the average amount spent on each item. This effect was found to be particularly large for high price elasticity goods. In the laboratory experiment, participants were randomly assigned to one of four groups that varied with respect to the kind of payment and the kind of incentives, eliminating the potential endogeneity problem from the field experiment. I found that compared to cash, mobile payments lead to a significantly higher willingness to pay (WTP) for consumption. In contrast to others, I found that pain of paying does not moderate the payment method effect; however, other psychological factors were found to work as potential mechanisms for affecting WTP.
We examine how Person-to-Person (P2P) payment methods affect consumers’ participative pricing decisions. Participative pricing is when people choose how much to pay for a good, or how much they will sell it for. This pricing mechanism is increasingly common, for example on platforms like Craigslist, eBay or Etsy. A successful transaction requires that consumers converge on a mutually acceptable price, yet decades of research on the endowment effect show that sellers often demand more for a good than buyers are willing to pay. We propose that compared to traditional payment methods, when consumers use P2P payments they make somewhat more cooperative pricing decisions - buyers are willing to pay a bit more and sellers are willing to accept a bit less. This attenuates the endowment effect and increases the odds of a successful trade. This occurs because even when trading with a stranger, P2P can subtly activate a social transaction context, cuing the social transaction pricing norm of making more cooperative pricing offers. Eight studies test these proposals using consequential and hypothetical choices, moderation and mediated moderation. A simulation indicates that compared to traditional payment methods, use of P2P can increase successful transactions in a marketplace by nearly 10%.
Religiusitas adalah internalisasi nilai agama seperti keyakinan, peribadatan, pengetahuan dan penghayatan terhadap ajaran agama yang kemudian diaktualisasikan dalam perbuatan dan sikap individu. Penelitian ini bertujuan untuk mengetahui hubungan antara dukungan sosial teman sebaya dengan religiusitas pada komunitas Cah Hijrah Semarang. Populasi dari penelitian berujumlah 127 subjek yang berasal dari komunitas Cah Hijrah Semarang. Teknik Purposive sampling yang di gunakan dalam penelitian ini. Metode pengambilan data menggunakan skala dukungan sosial teman sebaya (32 aitem α=0,909) dan skala religiusitas (26 aitem α=0.868). Data dianalisis dengan menggunakan analisis regresi sederhana. Hasil analisis menunjukkan nilai rxy= 0. 0,557, dengan p = 0.000 (p<0.05), artinya terdapat hubungan positif dan signifikan antara variabel dukungan sosial teman sebaya dengan variabel religiusitas. Dukungan sosial teman sebaya memberikan sumbangan efektif sebesar 31,1% terhadap religiusitas pada penelitian ini. Hal ini menunjukan bahwa hipotesis yang telah di tetapkan yaitu semakin positif persepsi dukungan sosial teman sebaya, maka semakin tinggi religiusitas pada anggota komunitas Cah Hijah Semarang dapat diterima.
Günümüzün değişen iktisadi ve sosyal yapısı içerisinde rekabet avantajı elde etmek amacıyla işletmeler farklı metotlar incelemeye ve bu metotları kullanmaya başlamışlardır. Bu amaç doğrultusunda, işletmelerin başarıya ulaşabilmesi için kaynaklarını etkin ve verimli kullanması gerekmektedir. Bu noktada, işletmelerin verimliliklerini devam ettirebilmeleri için lojistik bilişim sistemlerine geçmeleri artık bir zorunluluk haline gelmiştir. Bu açıdan, araştırmanın temel konusu olan e-lojistik uygulamalarında e-hizmet kalitesinin, alışveriş memnuniyeti, yeniden satın alma niyeti ve ödeme seçenekleri üzerindeki etkisi bir model oluşturularak ölçülmeye çalışılmıştır. Çalışmanın ilk aşamasında; çalışmanın örnekleme tekniği ve veri toplama yöntemleri ile ilgili bir araştırma metodolojisi sunulmaktadır. Çalışmanın metodolojisi oluşturulduktan sonra araştırma ile ilgili istatistiksel analizler sunulmuş, teorik ve yönetsel çıkarımlar tartışılmıştır. Ayrıca çalışma kapsamında oluşturulan model, yapısal eşitlik modeli ile analiz edilmiş ve oluşturulan modelin geçerli bir model olduğu kanıtlanmaya çalışılmıştır. Modelin yapısal olarak uyumlu olduğu, veriler neticesinde anlaşıldıktan sonra çalışma bünyesinde oluşturulan hipotezler test edilmiştir. Çalışma kapsamında elde edilen hipotez sonuçları ve bulgulara göre; e-lojistik uygulamalarında hizmet kalitesinin alışveriş memnuniyetini olumlu ve anlamlı bir şekilde etkilediği tespit edilmiştir. Ayrıca alışveriş memnuniyeti ölçeği, yeniden satın alma ölçeğini olumlu ve anlamlı bir şekilde etkilemektedir. Buradan tüketicilerin gözünde hizmet kalitesinin artmasının alışveriş memnuniyetini beraberinde getirdiğini ve bunun sonucunda tüketicilerin ürünü veya hizmeti tekrar satın alma eğiliminde olduğunu varsaymak mümkündür.
Research background: In the era of the COVID-19 pandemic, the tendency of bank customers to use mobile banking is increasing. This is primarily due to the perceived ease and benefits of its use and the subjective assessment of the level of security of such a system. The main goal will therefore be to create such a mobile banking system, which in the era of pandemics, in addition to an easy-to-use interface, will also offer increasingly advanced technological solutions that will provide the customer with a high level of security. In order to meet the expectations of customers, banks will continue to develop and improve the most popular channels of distribution of their services, which are undoubtedly payment cards.
Purpose: The purpose of this article is to define and classify non-cash payment instruments on the Polish banking services market in the COVID-19 pandemic era.
Research methodology: To examine the current situation prevailing in the payment card market, as well as the factors determining the development of non-cash payments and the direction of future changes in the COVID-19 pandemic era. The research used models of development tendency (trend), and then applied them to forecast changes that will take place on the payment cards market in Poland at the end of 2021 and in 2022. The analysis was carried out using the STATISTICA 13.3 program.
Results: a payment card is one of the best options for obtaining cash and every year the traditional cash in the wallet is being displaced more and more by “plastic money”.
Novelty: Furthermore, technological advances will bring new solutions to the payment card market and at the same time the e-money market will develop.
Both offline and online retailers use conditional promotions (CPs) to increase the value of a customer’s shopping cart. At times, the value of the cart falls short of the threshold order value to avail a CP. If a customer wants to avail the CP, he or she needs to add more products to the cart to reach the threshold order value. In this paper, we try to find how the mode of payment, relative distance to reach the threshold order value, and the initial cart orientation interact to determine the likelihood of Indian customers to avail CP and choices they make to add new products to reach the threshold order value. We conducted two quantitative experiments. Experiment 1 was a 2 × 2 × 2 design in an offline retail setup while Experiment 2 was a 2 × 2 design in an online retail setup. Results show that the likelihood of Indian customers in availing a CP offer increases with lesser pain of paying, lower relative distance to the threshold order value, and hedonic items in the pre-threshold value cart. Moreover, the products added to the cart to reach the threshold order value are also more hedonic in such conditions. On the other hand, the likelihood is lower and the products added are more utilitarian, when reverse conditions exist. We mention theoretical as well as managerial implications of our findings, limitations of the research and future directions for further research.
Consumer payment choice is based on heterogeneous preferences, availability, usage costs, and effective taxes. We examine the consequences of this choice on consumption distribution, aggregate output, welfare and the shadow economy. We analyze India’s sudden demonetization of 86% of the cash in circulation with new notes gradually being replaced over the next several months. The welfare cost of the liquidity shock was equivalent to 1% of consumption owing to the slow remonetization process. Even though all consumers experienced a decline in welfare, its extent varied depending on the degree of cash dependence and the ability to switch to non-cash payments. The middle consumption deciles were disproportionately affected.
Innovative payment methods have been getting worldwide attention. Exploring the mechanisms behind consumers’ purchase behaviors modulated by different payment methods was critical but challenging. In this paper, we proposed a 2 (payment methods: cash payment vs mobile payment) × 2 (price levels of products: high vs low) Event-Related Potentials (ERPs) experiment to study the difference of cash payment and mobile payment on consumers' purchase intention of products in different price level from a neuroscience perspective. Greater P200 amplitude was found in mobile payment condition, which meant that mobile payment captured more early attention resources than cash. Larger N270 amplitude was found in cash payment condition as the participants had to spend more cognitive resources and struggled more when using cash. Moreover, lower N270 amplitude was found in high-price product condition, which indicated that when there were limited cognitive resources, the affective process played a dominating role. Specifically, buying the high-price products with mobile payment, the consumers would experience the pleasure of consumption more rather than the pain of paying. The study offers insights on the cognitive process of consumers when they pay with different methods.
Cash is an important means of transaction, generally assumed to be fungible. However, behavioral economics and consumer research show that ‘cash in hand’, physically holding on to cash and then handing it away, affects purchasing decisions. I study how cash in hand influences decisions in a different, but very important domain: savings. Savings accounts are a promising tool for reducing poverty, but the use of savings accounts is often puzzlingly low. Holding on to cash that needs to be physically deposited into a savings account may increase the psychological costs of saving. This study experimentally identifies the causal effect of cash in hand on savings deposits of female microfinance clients in the Philippines. In contrast to many laboratory and several field studies with similar interventions, I do not find reduced savings deposits due to cash in hand.
In our research project, we tried to find answers to the questions related to psychological mechanisms for means of payment selection. With the first study, we aimed to answer the research question “Which means of payments are associated with low (high) psychological distance and, thus, cause concrete (or abstract) thinking?”. This research question is important due to two reasons: first, if we know what psychological distance is accompanied with a specific type of payment, we might be able to predict the willingness to pay and use a specific means of payment under the specified condition.
With the second study, we aimed to answer the research question “What is the degree of control associated with different means of payment?”. This research question expands the first study as the degree of control is correlated with the psychological distance. It should be noted that the second study focuses on one specific aspect of psychological distance - feeling of control - and applies it to three means of payment (cash, card, and mobile payment). This aspect is of interest as during the COVID-19 crisis individuals have a feeling of losing control over their lives (locus of control (Sigurvinsdottir et al., 2020) which might be reflected in the preferences with regard to means of payment.
Finally, with the third study, we approached the cultural differences. We assumed that the way how the means of payment look like, has an impact on its perception. Germans may perceive cash and card payments differently than people from other countries. Moreover, recent research suggests that the appearance of money has an impact on the level of psychological distance associated with the respective means of payment.
In the following, we present our studies including the most relevant results. We draw a conclusion from these studies at the end of the document. The presented results are preliminary, did not pass a peer review, and should be interpreted with care.
This paper empirically examines the mediating role of shopping satisfaction between electronic logistics service quality (e-LSQ) and repurchase intention. Further, this paper investigates the moderating role of gender, payment options, and returns or replacement experience on the link between e-LSQ and shopping satisfaction (and repurchase intention). Empirical data comprising 640 Indian online shoppers are analyzed with covariance-based structural equation modeling. The findings indicated that the condition of the shipment is the most crucial e-LSQ dimension and its linkage with shopping satisfaction varies across payment options, gender, and returning experience. The poor condition of the shipment might have triggered the returns in e-tailing in the Indian context. The findings will help e-tail managers design a robust logistics network to retain and win despondent customers.
The issue of creating a new unit of account - central banks digital currencies (CBDC), has been actively discussed in the past two years, both at the level of individual states and the international community. The discussion is based on the legal possibility and economic feasibility of expanding the list of financial instruments by creating a fundamentally new model of digital payments. However, despite the importance of this issue, states and the digital community have not yet come to a common understanding of the starting points on which the concept of a national digital currency (CBDC) should be based. In this regard, the purpose of this study is to identify the legal and economic advantages and disadvantages of two types of CBDC: direct and hybrid. To achieve this goal, the theoretical views on this issue were studied, as well as the conclusions made by experts in the course of a practical study of the CBDC possibilities.
This study estimates the effect of financial innovations on the frequency of cashless payments by cardholders in the Russian retail payments market. Using a representative nation-wide survey of 1500 individuals from 2017 this study finds significant robust evidence that various types of financial innovations promote activity of consumers in the retail payments market. This paper contributes to the existing literature in retail payments by empirically analyzing the effects of emerging and existing retail financial innovations on the consumers’ behavior in the Russian retail payments market. The results of the paper offer important implications for financial services providers and regulators by outlining the role of financial innovations in promoting cardholders activity.
Bisherige Verfahren zur Ermittlung der Risikoneigung (risikoavers, risikoneutral oder risikoliebend) weisen einige Schwächen auf. Sie sind zum Teil so komplex und anspruchsvoll, dass man von den Probanden häufig spontane, unüberlegte Antworten erhält. Dadurch kann die tatsächliche Risikoneigung häufig nicht zutreffend ermittelt werden. Darüber hinaus gibt es bei diesen Verfahren Konstellationen, in denen keine eindeutige Zuordnung zu den drei Kategorien der Risikoneigung möglich ist. Außerdem wird bei den bisherigen Ansätzen die Verlustaversion als wichtiger Einfluss auf die Risikoneigung nicht oder nicht ausreichend berücksichtigt. Wir schlagen ein neues Verfahren zur Ermittlung der Risikoneigung vor, das (1) extrem einfach und überschaubar ist, das (2) eine eindeutige Unterscheidung von risikoaversen, risikoneutralen und risikoliebenden Wirtschaftssubjekten erlaubt und das (3) den Einfluss der Verlustaversion auf die Risikoneigung angemessen berücksichtigt.
The notion of “abusive discrimination” encompasses a wide range of conduct
that may be enacted by a company holding a dominant position. Broadly
speaking, abusive discrimination may be distinguished between exclusionary
and non-exclusionary discrimination.
Social behavior is heavily influenced by the perception of the behaviors of others. We considered how perceptions (and misperceptions) of kindness can increase generosity in economic transactions. We investigated how these perceptions can alter behavior in a novel real-life situation that pitted kindness against selfishness. That situation, consumer elective pricing, is defined by an economic transaction allowing people to purchase goods or services for any price (including zero). Field and lab experiments compared how people behave in 2 financially identical circumstances: pay-what-you-want (in which people are ostensibly paying for themselves) and pay-it-forward (in which people are ostensibly paying on behalf of someone else). In 4 field experiments, people paid more under pay-it-forward than pay-what-you-want (Studies 1-4). Four subsequent lab studies assessed whether the salience of others explains the increased payments (Study 5), whether ability to justify lowered payments (Study 6), and whether the manipulation was operating through changing the perceptions of others (Studies 7 and 8). When people rely on ambiguous perceptions, pay-it-forward leads to overestimating the kindness of others and a corresponding increase in personal payment. When those perceptions are replaced with explicit descriptive norms (i.e., others' payment amounts), that effect is eliminated. Finally, subsequent studies confirmed that the effects were not driven by participant confusion (Studies 9A and 9B) and not limited by the specificity of the referent other in the pay-it-forward framing (Study 9C). (PsycINFO Database Record (c) 2014 APA, all rights reserved).
Respondents in marketing surveys are often asked to estimate future expenses on products and services to assist marketers in arriving at market-share forecasts. To estimate future expenses for products and services, respondents may use information about past expenses, information about past behavioral frequencies for a related behavior, or both, if they are elicited prior to eliciting estimates of future expenses. To the extent that these sources of information are biased due to the manner in which they are elicited, subsequent estimates of future expense are biased. This article investigates the effect of response alternatives used to elicit behavioral frequencies on subsequent estimates of future expense related to the behavior. Two experiments demonstrate that past and future expense estimates are affected by the range of response alternatives used to elicit a related behavioral frequency prior to eliciting the expense estimate. This effect holds, however, only when the behavior is irregular. Further, the relative use of past expenses versus behavioral frequencies to estimate future expenses is a function of the presence and range of response alternatives used to elicit the behavioral frequency, the regularity of the behavior, and the order in which these are elicited. The results emphasize that the importance of question sequencing in surveys is a function of the regularity of the target behavior.
This article develops a conceptual framework to examine how consumers incorporate mem- ory-based and context-based cues in estimating past and future credit card expenses. Focusing on memory-based information, in this framework we suggest that past credit card expenses may be recalled as holistic totals or episodic individual expenses depending on the accessibility of each form of expense. We tested the conceptual framework with 3 studies. Study 1 showed that the recency of past expenses and frequency of credit card usage moderated the extent to which past expenses were used in estimating future expenses. Study 1 also showed that self-awareness of estimation bias affected consumers' estimates of future expenses. Study 2 showed that a de- composition strategy (unbundling a total into subcategories), which serves to make episodic in- dividual expenses more accessible, was effective in reducing sampling-based bias. Study 3 pro- vided a validity check and showed that decomposition cues reduced estimation errors and affected estimates of future expense. In this article, we demonstrate the manner in which mem- ory-based information is used to make estimates, and we also demonstrate the effectiveness of decomposition as a debiasing technique for past and future estimates.
We apply conjoint analysis to study the influence of tax labeling and tax earmarking on German taxpayers' willingness to contribute. From a survey based sample we show that labeling and earmarking effects can substantially increase participants' willingness to contribute, which results in a considerable deviation from a pure consumption maximizing behavior. Furthermore, we give an explanation for this effect regarding socio-demographic attributes of German taxpayers. These results explain the variety in tax labels and provide implications for tax policy regarding further reforms of the tax and contribution system: Labeling and earmarking of contributions are important instruments in selling policies and increasing tax revenue. --
Consumers often behave differently than they would ideally like to behave. We propose that an anticipatory pain of paying drives “tightwads” to spend less than they would ideally like to spend. “Spendthrifts,” by contrast, experience too little pain of paying and typically spend more than they would ideally like to spend. This article introduces and validates the “spendthrift-tightwad” scale, a measure of individual differences in the pain of paying. Spending differences between tightwads and spendthrifts are greatest in situations that amplify the pain of paying and smallest in situations that diminish the pain of paying.
Purpose
The purpose of this paper is to present exploratory research into the holding and usage of credit cards by a distinct segment of the Chinese population, who are “early adopters” of this product.
Design/methodology/approach
Primary data collection using survey methodology. A sample of the urban‐affluent population in China was utilized to gauge preferences and attitudes towards the use of credit cards.
Findings
The respondents were comfortable with the holding and use of credit cards and particularly recognised their value for spending on travel and entertainment. The research also identified purchase trigger points, which indicated that the use of credit cards for purchases above certain value was already prevalent with this sample of urban‐affluent Chinese consumers.
Research limitations/implications
The sample was drawn from a narrower base than the actual target population of urban‐affluent market, but an available and valid respondent set, which offers insights into the “early‐adopters” of the credit card product in China.
Practical implications
Hitherto there has been a very limited amount of research into payment cards in China and yet with the market for financial services opening up in China from 2007, this research is timely both for domestic Chinese banks wishing to issue credit cards and for foreign entrants, seeking to enter the Chinese market via their expertise in credit cards.
Originality/value
The paper presents focused research on the attitudes towards credit cards, with the urban‐affluent consumers, who are the most likely early‐adopters of this product.
Do payment mechanisms change the way consumers perceive products? We argue that consumers for whom credit cards (cash) have been primed focus more on benefits (costs) when evaluating a product. In study 1, credit card (cash) primed participants made more (fewer) recall errors regarding cost attributes. In a word recognition task (study 2), participants primed with credit card (cash) identified more words related to benefits (costs) than those in the cash (credit card) condition. In study 3, participants in the credit card (cash) condition responded faster to benefits (costs) than to costs (benefits). This differential focus led credit card primed consumers to express higher reservation prices (studies 1–3) and also affected their product choices (study 4) relative to those primed with cash.
In studies involving genuine transactions of potentially high value we show that willingness-to-pay can be increased when customers are instructed to use a credit card rather than cash. The effect may be large (up to 100%) and it appears unlikely that it arises due solely to liquidity constraints. In addition to demonstrating the effect, we provide a methodology for detecting it, and our findings suggest a source of variance to test alternative explanations.
In a field experiment, we measure the impact of payment with credit card as compared with cash on insurance company employees' spending on lunch in a cafeteria. We exogenously changed some diners' payment medium from cash to a credit card by giving them an incentive to pay with a credit card. Surprisingly, we find that credit cards do not increase spending. However, the use of credit cards has a differential impact on spending for revolvers and convenience users: Revolvers spend less when induced to spend with a credit card, whereas convenience users display the opposite pattern.
Some food items that are commonly considered unhealthy also tend to elicit impulsive responses. The pain of paying in cash can curb impulsive urges to purchase such unhealthy food products. Credit card payments, in contrast, are relatively painless and weaken impulse control. Consequently, consumers are more likely to buy unhealthy food products when they pay by credit card than when they pay in cash. Results from four studies support these hypotheses. Analysis of actual shopping behavior of 1,000 households over a period of 6 months revealed that shopping baskets have a larger proportion of food items rated as impulsive and unhealthy when shoppers use credit or debit cards to pay for the purchases (study 1). Follow-up experiments (studies 2–4) show that the vice-regulation effect of cash payments is mediated by pain of payment and moderated by chronic sensitivity to pain of payment. Implications for consumer welfare and theories of impulsive consumption are discussed.
In the standard economic account of consumer behavior the cost of a purchase takes the form of a reduction in future utility when expenditures that otherwise could have been made are forgone. The reality of consumer hedonics is different. When people make purchases, they often experience an immediate pain of paying, which can undermine the pleasure derived from consumption. The ticking of the taxi meter, for example, reduces one's pleasure from the ride. We propose a “double-entry” mental accounting theory that describes the nature of these reciprocal interactions between the pleasure of consumption and the pain of paying and draws out their implications for consumer behavior and hedonics. A central assumption of the model, which we call prospective accounting, is that consumption that has already been paid for can be enjoyed as if it were free and that the pain associated with payments made prior to consumption (but not after) is buffered by thoughts of the benefits that the payments will finance. Another important concept is coupling, which refers to the degree to which consumption calls to mind thoughts of payment, and vice versa. Some financing methods, such as credit cards, tend to weaken coupling, whereas others, such as cash payment, produce tight coupling.
Our model makes a variety of predictions that are at variance with economic formulations. Contrary to the standard prediction that people will finance purchases to minimize the present value of payments, our model predicts strong debt aversion—that they should prefer to prepay for consumption or to get paid for work after it is performed. Such pay-before sequences confer hedonic benefits because consumption can be enjoyed without thinking about the need to pay for it in the future. Likewise, when paying beforehand, the pain of paying is mitigated by thoughts of future consumption benefits. Contrary to the economic prediction that consumers should prefer to pay, at the margin, for what they consume, our model predicts that consumers will find it less painful to pay for, and hence will prefer, flat-rate pricing schemes such as unlimited Internet access at a fixed monthly price, even if it involves paying more for the same usage. Other predictions concern spending patterns with cash, charge, or credit cards, and preferences for the earmarking of purchases.
We test these predictions in a series of surveys and in a conjoint-like analysis that pitted our double-entry mental accounting model against a standard discounting formulation and another benchmark that did not incorporate hedonic interactions between consumption and payments. Our model provides a better fit of the data for 60% of the subjects; the discounting formulation provides a better fit for only 29% of the subjects (even when allowing for positive and negative discount rates).
The pain of paying, we argue, plays an important role in consumer self-regulation, but is hedonically costly. From a hedonic perspective the ideal situation is one in which payments are tightly coupled to consumption (so that paying evokes thoughts about the benefits being financed) but consumption is decoupled from payments (so that consumption does not evoke thoughts about payment). From an efficiency perspective, however, it is important for consumers to be aware of what they are paying for consumption. This creates a tension between hedonic efficiency and what we call decision efficiency. Various institutional arrangements, such as financing of public parks through taxes or usage fees, play into this tradeoff. A producer developing a pricing structure for their product or service should be aware of these two conflicting objectives, and should try to devise a structure that reconciles them.
Decision making related to finances is of significant importance. A major factor underlying financial decision making involves
differences in consumers’ spending self-control (CSSC). We conceptualize CSSC as an individual difference, distinct from general
self-control, develop a parsimonious measure to assess it, and demonstrate important related consequences and behaviors. Further,
we examine how underlying differences in CSSC impact the effectiveness of a self-control strategy that has recently received
attention in public policy legislation—enhancing consumers’ awareness of the future consequences of present behavior through
the provision of outcome elaboration prompts. Results from our studies suggest that outcome elaboration prompts (that is,
external stimuli used to encourage consumers to consider the future outcomes of their present decisions) differentially impact
consumers’ self-control effectiveness depending on their inherent CSSC. Specifically, the presence of outcome elaboration
prompts enhances self-control for low CSSC consumers, but does not affect the choices of high CSSC consumers. Furthermore,
we provide direct evidence that it is a differential focus on future outcomes that drives the distinct responses of high-
versus low-CSSC consumers to the provision of outcome elaboration prompts.
KeywordsSelf-control–Spending–Outcome elaboration prompts–Future outcome elaboration–Credit cards–Goals
This article draws on current and classical psychological theories of consumer behavior to review current findings in the psychology and economics literature on the subjective value of money, using an information processing framework. Consumers subjectively value both prices and money. That is, consumers value an identical economic value as a price or as a sum of money differently depending on their individual characteristics, price presentation characteristics, monetary form characteristics, and the consumer context due to subjectivity in their: Perception (biases in assessing the subjective value of money and prices); Inferences (whether consumers use price information to make other judgments); affect (the feelings and emotions associated with spending and saving); memory (errors and biases in recall of money and prices); and information integration (the manner in which consumers integrate costs and benefits to make decisions of whether, when, how much, and what to spend on).
The Technology Acceptance Model (TAM) has received considerable research attention in the IS field over the past decade, placing an emphasis on the roles played by perceived ease-of-use and perceived usefulness in influencing technology adoption decisions. Meanwhile, alternative sets of antecedents to adoption have received less attention. In this paper, sets of antecedent constructs drawn from both TAM and the Perceived Characteristics of Innovating (PCI) inventory are tested and subsequently compared with one another. The comparison is done in the context of a large-scale market trial of a smart card-based electronic payment system being evaluated by a group of retailers and merchants. The PCI set of antecedents explains substantially more variance than does TAM, while also providing managers with more detailed information regarding the antecedents driving technology innovation adoption.
Labeled the "denomination effect," study 1 shows in three field studies that the likelihood of spending is lower when an equivalent sum of money is represented by a single large denomination (e.g., one $20 bill) relative to many smaller denominations (e.g., 20 $1 bills). In two of the three field studies, individuals spent more once the decision to spend had been made. Study 2 then shows that consumers deliberately choose to receive money in a large denomination relative to small denominations when there is a need to exert self-control in spending. Study 3 further shows that the denomination effect is contingent on individual differences in people's desire to reduce the pain of paying associated with spending. The results suggest that the denomination effect occurs because large denominations are psychologically less fungible than smaller ones, allowing them to be used as a strategic device to control and regulate spending. (c) 2009 by JOURNAL OF CONSUMER RESEARCH, Inc..
A field experiment (N = 113,047 participants) manipulated two factors in the sale of souvenir photos. First, some customers saw a traditional fixed
price, whereas others could pay what they wanted (including $0). Second, approximately half of the customers saw a variation
in which half of the revenue went to charity. At a standard fixed price, the charitable component only slightly increased
demand, as similar studies have also found. However, when participants could pay what they wanted, the same charitable component
created a treatment that was substantially more profitable. Switching from corporate social responsibility to what we term
shared social responsibility works in part because customized contributions allow customers to directly express social welfare
concerns through the purchasing of material goods.
This article examines systematic differences in people's spending behavior when using foreign currencies. Rather than overspend or underspend in general, we show that individuals' valuation of a product in an unfamiliar foreign currency is biased toward its nominal value--its face value--with inadequate adjustment for the exchange rate. This leads to underspending when the face value of a foreign currency is a multiple of an equivalent unit of a home currency (e.g., 4 Malaysian ringgits = 1 U.S. dollar) and overspending when it is a fraction (e.g., .4 Bahraini dinar = 1 U.S. dollar). Four studies demonstrate the robustness of the face value effect across different currencies, exchange rate frames, and with samples from two countries, and two studies show that ability-related factors such as time pressure and experience moderate the face value effect. The article concludes by discussing the theoretical implications of the findings. Copyright 2002 by the University of Chicago.
Ever since the first general-purpose charge card debuted in the early 1950s, pundits have been predicting the "cashless society". Over fifty years later, we may finally be getting close to that vision. This study is the first to examine empirically the move toward a cashless society using a cost-benefit framework. We find that when all key parties to a transaction are considered and benefits are added, cash and checks are more costly than many earlier studies suggest. In general, the shift toward a cashless society appears to be a beneficial one.
We document the phenomenon of "bias for the whole," wherein greater value is perceived for money in the form of a whole (large denomination) than for equivalent amounts of money in parts (smaller denominations), resulting in a lower inclination to spend with the whole. We demonstrate across four experiments that the bias arises from greater processing fluency experienced in processing the whole as opposed to parts. This processing fluency is hedonically marked and generates positive affect that is attributed to the money, which results in an overvaluation of the whole, making one reluctant to spend with the whole. (c) 2006 by JOURNAL OF CONSUMER RESEARCH, Inc..
This article examines consumer spending as a function of payment mode both when the modes differ in terms of payment coupling (association between purchase decision and actual parting of money) and physical form as well as when the modes differ only in terms of form. Study 1 demonstrates that consumers are willing to spend more when a credit card logo is present versus absent. Study 2 shows that the credit card effect can be attenuated when people estimate their expenses using a decomposition strategy (vs. a holistic one). Noting that credit card and cash payments differ in terms of payment coupling and form, Studies 3 and 4 examine consumer spending when the payment mode differs only in physical form. Study 3 demonstrates that consumers spend more when they are spending scrip (a form of stored value certificate) versus cash of the same face value. Study 4 shows that the difference in spending across payment modes (cash and gift certificates) is attenuated by altering the salience of parting with money through contextual manipulations of the differences between cash and gift certificates.
There are numerous ways to indicate the degree of banking competition across countries. Antitrust authorities rely on the structure-conduct-performance paradigm while academics prefer price mark-ups (Lerner index) or correlations of input costs with output prices (H-statistic). These measures are not always strongly correlated within or across countries. Frontier efficiency analysis is used to devise an alternative indicator of competition and rank European countries by their dispersion from a "competition frontier". The frontier is determined by how well payment and other costs explain variations in loan-deposit rate spread and non-interest activity revenues. Overall, differences in competition appear to be small.
This study empirically examines the role of consumer trust and its antecedents in determining consumers' intention to adopt mobile payment. This research proposes that consumers' willingness to adopt mobile payment depends on their assessment of the trustworthiness of mobile service provider and vendor, their assessment of the functional reliability of mobile payment systems as well as their general disposition to trust and their cultural background, in particular, uncertainty avoidance. Data were gathered from 302 participants in Auckland, New Zealand. Results show that all five sets of trust antecedents influence the development of trust and trust is an important predictor of intention to adopt mobile payment. Both theoretical and practical implications are discussed.
We survey 1,050 consumers who have just redeemed one or more open loop gift certificates to learn whether they view gift certificate income, cash gifts and non-gift income as substitutes. We find that the majority (83%) of recipients spends the certificates in the same way as cash. The other respondents (17%) bought an item they would not have bought otherwise but adjustments in their shopping pattern do not seem to result from constraints in redeeming the certificates: 80% all respondents in this group says they have used the certificate to buy an item they really love to have. While inconsistent with standard microeconomic demand theory, this behavior can be explained by narrow bracketing: In spending gift certificates, these consumers consider a limited choice set of nice, personal items. Our data show that females are more likely to narrow bracket gift certificate income and that positive reciprocity towards the giver induces narrow bracketing in case the giver is a household member who suggests to buy a particular item using the ceritificate.
Previous studies have found that both giving in-kind gifts (Waldfogel, 1993) as giving gift cards (Offenberg, 2007) entail a welfare loss of 10–30 percent when compared to giving cash. We find that the welfare effects of open loop gift certificates among users are limited: The consumption of broad bracketing consumers is unaffected and narrow bracketing consumers seem to value the possibility to separate gift certificate income from other income sources.
An experimental approach is used to examine how money denomination and the choice between or availability of coins and banknotes may influence consumers’ purchasing behaviour. Evidence shows that for small amounts of money, consumers may prefer a smaller monetary value in banknotes rather than a higher value in coins. Findings also suggest that people carrying coins are more likely to make a purchase of small value than people not carrying coins.
Electronic commerce (E-commerce) is sharing business information, maintaining business relationships, and conducting business transactions by means of telecommunications networks. Traditional E-commerce, conducted with the use of information technologies centering on electronic data interchange (EDI) over proprietary value-added networks, is rapidly moving to the Internet. The Internet's World Wide Web has become the prime driver of contemporary E-commerce. This paper presents a hierarchical framework of E-commerce, consisting of three meta-levels: infrastructure, services, and products and structures, which, in turn, consist of seven functional levels. These levels of E-commerce development, as well as of analysis, range from the wide-area telecommunications infrastructure to electronic marketplaces and electronic hierarchies enabled by E-commerce. Several nodal problems are discussed that will define future development in E-commerce, including integrating electronic payment into the buying process, building a consumer marketplace, the governance of electronic business, and the new intermediation. The paper also introduces the International Journal of Electronic Commerce, which will provide an integrated view of the new E-commerce.
A person deciding on a career, a wife, or a place to live bases his choice on two factors: (1) How much do I like each of the available alternatives? and (2) What are the chances for a successful outcome of each alternative? These two factors comprise the utility of each outcome for the person making the choice. This notion of utility is fundamental to most current theories of decision behavior. According to the expected utility hypothesis, if we could know the utility function of a person, we could predict his choice from among any set of actions or objects. But the utility function of a given subject is almost impossible to measure directly. To circumvent this difficulty, stochastic models of choice behavior have been formulated which do not predict the subject's choices but make statements about the probabilities that the subject will choose a given action. This paper reports an experiment to measure utility and to test one stochastic model of choice behavior.
Pigouvian taxes are efficient -- but unpopular among voters -- and hence often politically infeasible. Earmarking of revenues has been widely reported to increase public support for taxes, but earmarking is generally not the most efficient use of the revenues. This trade-off between efficiency and political feasibility is the motivation for our primary research objective: to quantify the effect of earmarking on support for fuel tax rises. Our secondary research objective is to investigate why earmarking increases support. Using data from a representative sample of the Norwegian voter population (NÂ =Â 1147), we estimate models of voter preferences for fuel taxes using logistic regression models. Our results show that, in the absence of earmarking, the majority of voters would like to reduce fuel taxes, but earmarking the revenues for environmental measures has a substantial effect on voter support for fuel tax increases, garnering a majority for increases of up to 15% above present levels. Further analysis indicates that a prime reason why earmarking for environmental measures is popular is that it increases the perceived environmental effectiveness of the tax, and hence its legitimacy as an environmental rather than a fiscal policy instrument.
This paper examines the impact of payment choice on charitable giving with a door-to-door fund-raising field experiment. Respondents can donate cash only, use debit only, or have both options. Cash donations have lower visibility vis-à-vis solicitors than debit card donations. When debit replaces cash, participation drops by 87 percent. Conditional on participation, donors in the Debit-only treatment give more than donors in Cash-only. In Cash&Debit, almost all donors prefer cash; participation decreases compared to Cash-only. Physical attractiveness of both female and male solicitors increases contributions. Solicitor self-confidence has a negative impact. (JEL D14, D64, L31)
Recent research suggests that the method of making a payment can influence the willingness to pay and consumption behavior. In this manuscript, we argue that payment mechanisms differ from each other along the dimensions of transparency, and that the degree of transparency correlates positively with the pain of paying using the mechanism, and negatively with consumption and spending. We replicate previous experimental results using quasi-experiments from the field, and find that the lower the payment transparency, the greater is the consumption. However, this effect is weak for products whose consumption rates are inflexible.
Contingent valuation surveys in which respondents state their willingness to pay (WTP) for public goods are coming into use in cost-benefit analyses and in litigation over environmental losses. The validity of the method is brought into question by several experimental observations. An embedding effect is demonstrated, in which WTP for a good varies depending on whether it is evaluated on its own or as part of a more inclusive category. The ordering of various public issues by WTP is predicted with significant accuracy by independent ratings of the moral satisfaction associated with contributions to these causes. Contingent valuation responses reflect the willingness to pay for the moral satisfaction of contributing to public goods, not the economic value of these goods.
As mobile technologies and services are in constant evolution, many speculate on whether or not mobile payments will be a killer application for mobile commerce. To have a better understanding of the market, there is a need to analyze not only the technology but also the different actors that are involved. For this purpose, we propose to conduct two disruption analyses to draw the disruptiveness profile of mobile payment solutions compared to other payment instruments. Then, we try to discover what factors have hindered the technical and commercial development by using a DSS based on a multi-criteria decision making method called Electre I.
The mobile payment services markets are currently under transition with a history of numerous tried and failed solutions, and a future of promising but yet uncertain possibilities with potential new technology innovations. At this point of the development, we take a look at the current state of the mobile payment services market from a literature review perspective. We review prior literature on mobile payments, analyze the various factors that impact mobile payment services markets, and suggest directions for future research in this still emerging field. To facilitate the analysis of literature, we propose a framework of four contingency and five competitive force factors, and organize the mobile payment research under the proposed framework. Consumer perspective of mobile payments as well as technical security and trust are best covered by contemporary research. The impacts of social and cultural factors on mobile payments, as well as comparisons between mobile and traditional payment services are entirely uninvestigated issues. Most of the factors outlined by the framework have been addressed by exploratory and early phase studies.
Dramatic changes have occurred in the U.S. payment system over the past two decades, most notably an explosion in electronic card-based payments. This shift has led to a series of policy debates driven in part by consumers' choice of payment instruments. Using a new nationally representative survey, we transform consumer responses to open-ended questions into product rankings and estimate a characteristics-based rank-order logit model in order to quantify consumer substitution among payment methods. Our estimates are then used to conduct supply-driven and demand-driven counterfactual experiments in order to estimate market share and cost effects. From a counterfactual experiment in which merchants stop accepting credit cards, we predict merchant costs to decline substantially. Because merchants accept credit cards nonetheless, we regard our finding as evidence either that the credit card networks hold market power, or that merchants experience unmeasured intangible benefits from credit card acceptance. We also predict that contactless debit will take market share from cash, checks, and credit, and that the age/cohort effect alone is unlikely to cause debit card use to increase substantially over a 10-year period.
In this paper, we combine two theories of the dynamics of a large socio-technical system — technology drift and actor-network theory — to address how and why information technologies often need to change, relative to their initial conceptions, during implementation. We analyze the failure of the first introduction of electronic cash in Umeå, Sweden as an example of what happens when drift does not occur: the lack of drift resulted in the socio-technical system's failure to stabilize. Lack of flexibility is identified as an important reason for the card's poor public acceptance. Banks ignored the critical comments of merchants, thus refusing to negotiate about the intended role of the technology. The cards were perceived as serving only the needs of the banks, while ignoring the needs of merchants and card users. Based on the findings in this case study, we argue that in order for a socio-technical system to stabilize it must drift from a single-purpose network, reflecting the interest and agenda of its designers/originators, to a multi-purpose network that reflects the interests of all involved social actors. In addition, we argue that a network-building process can be successful only if the network is flexible enough to serve the multiple purposes of its constituent actors.
We analyzed the consumer’s payment option to use debit, general purpose credit cards, gasoline credit cards, or cash. Based on the results from a nested multinomial logit model, we found consumers are more likely to use cash when they have less education, lower incomes, are middle-aged, and own fewer credit cards. Debit and credit card users are younger, more educated, and hold more credit cards. Respondents who use their debit card are less likely to use their gasoline credit card. The results suggest that greater debit card usage will place the greatest competitive pressure on the gasoline credit card program.
This paper presents a qualitative study on consumer adoption of mobile payments. The findings suggest that the relative advantage of mobile payments is different from that specified in adoption theories and include independence of time and place, availability, possibilities for remote payments, and queue avoidance. Furthermore, the adoption of mobile payments was found to be dynamic, depending on certain situational factors such as a lack of other payment methods or urgency. Several other barriers to adoption were also identified, including premium pricing, complexity, a lack of critical mass, and perceived risks. The findings provide foundation for an enhanced theory on mobile payment adoption and for the practical development of mobile payment services.
Time-series data on cash use in any country is essentially nonexistent. An econometric model is developed to overcome this difficulty. Applied to the US, we estimate cash use over the past 25 years. The share of cash in (legal) consumer payments appears to have fallen by a third, from 0.31 in 1974 to 0.20 in 2000. Checks replaced some cash during the 1970s, credit cards replaced some checks during the 1980s, while debit cards replaced both cash and checks in the 1990s. Even so, cash is not projected to go to zero anytime soon (95 words).
Mobile technology has become increasingly common in today’s everyday life. However, mobile payment is surprisingly not among the frequently used mobile services, although technologically advanced solutions exist. Apparently, there is still a lack of acceptance of mobile payment services among consumers. The conceptual model developed and tested in this research thus focuses on factors determining consumers’ acceptance of mobile payment services. The empirical results show particularly strong support for the effects of compatibility, individual mobility, and subjective norm. Our study offers several implications for managers in regards to marketing mobile payment solutions to increase consumers’ intention to use these services. Full text PDF available online.
In this paper we analyze the relationship between the income sources of custodial divorced parents and their expenditure patterns. We use data from the Consumer Expenditure Survey to directly investigate the issue of whether or not divorced mothers receiving child support income spend larger amounts on "child goods" than those not receiving child support holding total household income constant. By comparing the estimated coefficients on child support income and other income in an "endogenous" Engel curve specification we argue that we can classify child goods as being public or private and say something about the expenditure patterns of noncustodial fathers under a Nash equilibrium model of parental expenditures on public child goods and some plausible assumptions regarding the manner in which child support transfer decisions are made by noncustodial fathers. Our empirical results indicate that income composition does affect the expenditure patterns of divorced mothers and that consumption externalities exist even among divorced parents.
We offer a selected survey of retail payments and suggest areas where additional research would prove useful. After summarizing eight papers presented at a recent Norges Bank (Central Bank of Norway) payment conference and published in this volume, we show how they, and many of the other papers presented there, have contributed to the payments literature. We also illustrate how institutional and other differences across countries led to different payment arrangements historically which now, due to technological innovation affecting bank costs, have made payment arrangements across countries more homogeneous.