Will mobile payment make us spend more?

Does the way in which we pay for goods affect our perception of the value of the amount of money we spend? If we were all rational beings, this would not happen. $50 in cash has the same value of $50 that is debited on a credit card, but it turns out this is not the case.

There are various studies that support the theory that using credit cards for our purchases dulls the “pain of paying” as it is called by Raghubir and Srivastava. There are different reasons for this, the main one is that when using credit cards, we don’t immediately realize that we are spending money, our wallet is not lighter, and there is a brief period of time before we actually receive the bill of the purchase made. When that happens, it’s already too late to regret a purchase that we probably did not need, and we have already forgot what that money was used for.

Have you ever realized that when you use your credit card you are willing to spend more money than you would if you were to use cash? If you haven’t, try thinking about it next time you pull out that little piece of flat plastic from your wallet, because there are studies that support this theory too.

Credit and debit cards have gained wide popularity nowadays, and many economies are moving towards more and more cashless societies. Sweden is a good example. In the last years, cash has nearly disappeared and it has become nearly impossible to purchase subway tickets or simply shopping at groceries stores using cash. According to Sweden’s central bank, cash transactions made up only 2% of the value of all payments made in the country in 2015, which has resulted in huge convenience for both consumers and retailers alike.

With the increased popularity of mobile payment, cash is bound to completely disappear in the years to come, ceding space to more and more cashless way of payments. Credit cards, PayPal, mobile payment, they are all different steps of the same type of evolution, which will bring our economies to abandon cash as we know it.

But what happens when we separate money from the actions of payment? Will this affect our perception of the money we spend?

Mobile payment functions pretty much like texting. These methods are already wide spread in China, with Alipay and WeChat, the two tech giants that share the mobile market in the mainland, and will soon become more and more popular in the rest of the world. Mobile payment is considered safer, cash notes cannot be falsified, and consumers find it extremely convenient to just use their smartphone to make payments.

Imagineyou are at the grocery store after a day of work, you are lining up at the cashier and after the old retired woman who could have gone to buy her vegetables at any other moment of the day (but decided to wait until 5 pm) finished counting her pennies, it is finally your turn. You fill your bags with your milk and eggs and you just show your smartphone to the cashier, which was already out of your pocket because you were checking your Facebook stats. Easy, isn’t it?

Would you remember how much you paid? Probably not, and probably you wouldn’t even care. Sure, you could check your transactions on your mobile once home, but very few of us would. Now imagine that this could happen every time you are out and want to buy a coffee, a new bag, a laptop or a car. Every time you would just pull out your smartphone, type your PIN number and send a payment, just like a normal text. Would you keep count of everything you spend? That’s hard to say.

When the act of payment is detached from the commodity we have always used to pay (physical money) it is hard for our brain to understand that we are still making the same action (paying). “That’s a mobile” our subconscious would tell us confused “not a wallet”.

With the slow disappearance of cash, we will need to train our mind to understand the “dangers” of cashless payments. Mobile payment, for how convenient and safe might sound, could also trick us into spending unnecessary amount of money into things that we don’t really need and influence purchasing behaviors that would have not emerged had we used our old and trustworty cash.


“Monopoly money: The effect of payment coupling and form on spending behavior”. Raghubir, Priya; Srivastava, Joydeep Journal of Experimental Psychology: Applied, Vol 14(3), Sep 2008, 213–225;

Does It Matter Whether You Pay With Cash Or A Credit Card? Are there any downsides to using credit cards instead of cash?” Utpal Dholakia,

Credit Cards Make You Spend More: Studies”. Lindsay Konsko