A lot of people find that paying for a purchase with cash causes them to feel more guilty about the cost. Paying with a credit or debit card makes it easier to spend the money without dwelling on the price – not always a good thing for consumers. But research has shown that this goes beyond our perception of the purchase; consumers actually spend more money with cashless payment options.
Research conducted on the subject has shown that people will spend more money if the payment method is deemed “easier”. People will spend more when paying with a credit card than they will when they pay with cash. And this trend is continuing as payment solutions get even easier. A study conducted by MasterCard has revealed that consumers can spend as much as 30% more with the new contactless payment methods than they do with a credit card.
MasterCard broke up the study into three categories. The company looked at their customers’ accounts, and divided them into high, medium, and low spending segments based on monthly expenditure before the company introduced contactless payment methods. Afterwards, the 30% increase was consistent in all three expenditure groups. Additionally, spending numbers increased for online, abroad, and recurring payments when using the contactless methods.
This increase in spending is very advantageous for businesses and banks, and the research should serve as an incentive to offer cashless options. Consumers, however, may find that they need to be cautious with these systems and remain conscious of their spending. Luckily, some cashless payment options also make it easier to track spending by offering a variety of convenient ways to check balances at any time.