Oliver Johnson
You use Apple Pay or another mobile payment service to make purchases? In this case, you will be able to spend more than if you relied on a physical credit card or cash.
Services like Google Pay and China-based Alipay, which let you pay by hovering your phone over a terminal and clicking a button, can make consumers spend more money than they otherwise would, largely Because of the ease with which systems make it easy to buy things, new ones search show.
The ease and convenience of paying leads consumers to spend more compared to when they paid with a credit card, according to the study, led by Yuqian Zu, assistant professor at the University of North Carolina Hill’s Kenan-Flagler Business School. of the Chapel.
Studying the payment activities of a leading bank in Asia before and after the launch of Alipay, the largest mobile payment platform, researchers found that the mobile payment service led to higher spending.
How much more do people spend on their phones?
Consumers spent more money and made more purchases when clicking to pay. Researchers found that customers charged, on average, 9.4% more on their credit cards, both online and in person, after they started making mobile payments. They also made more purchases.
Cell phone payments are convenient in more ways than one. First, transactions are faster, taking an average of 29 seconds, compared to 40 seconds when paying with a physical credit or debit card, according to the study.
“This fast transaction speed contributes significantly to the overall convenience experienced by users,” Zu told CBS MoneyWatch.
Secondly, mobile payments mean consumers don’t need to carry wallets or purses. Many people believe this makes business activities safer.
“This aspect alone can improve consumers’ perceived security of payments,” Zu said. “It is not necessary to present a card with numbers. And also by eliminating the need for a physical card, mobile payment systems speed up the transaction process and provide a feeling of ease and security for users.”
Although the study does not examine the issue, Zu also believes that the ease of mobile payments could lead to consumers accumulating more debt.
“Personally, I think this could be a contributing factor as to why people are spending more,” she said.
Zu isn’t suggesting we turn off our phones or delete payment apps to avoid overspending. But she considers it important for consumers to be aware of the potential behavioral changes that mobile payment services can facilitate, including a tendency to spend with fewer restrictions.
“The findings are very important for the general population to know – that with convenience, it is possible to spend more,” she said.
This includes impulsive spending at checkouts and online, where consumers can safely store their credit card information.
“Because of the convenience, you don’t even realize you bought things,” she said. Just keeping this in mind can help consumers “better manage their financial resources and reduce impulsive spending.”
