Do you make purchases using Apple Pay or any other mobile payment service? If this is the case, you could be spending more than you would if you used cash or a real credit card.
Do you make purchases using Apple Pay or any other mobile payment service? If this is the case, you could be spending more than you would if you used cash or a real credit card. (Photo : by KENZO TRIBOUILLARD/AFP via Getty Images)
According to recent study, the ease with which services such as Google Pay and China's Alipay allow users to pay by just putting their phone over a terminal and pressing a button might cause users to spend more money than they otherwise would.
According to the study, which was headed by Yuqian Zu, assistant professor at the Kenan-Flagler Business School at the University of North Carolina in Chapel Hill, consumers spend more when they tap to pay because it's convenient and easy.
Researchers observed changes in payment behavior from a major Asian bank before and after the largest mobile payment platform, Alipay, was introduced. They discovered that the use of mobile payment services increased consumer spending.
Amount of Money People Spend Using Mobile Payments
When using tap to pay, consumers made more purchases and spent more money overall. The researchers discovered that once they began using mobile payments, consumers charged an average of 9.4% more to their credit cards both in-person and online. They also bought additional stuff.
Paying using a mobile phone is convenient in a number of ways. First off, the survey shows that transactions are faster, averaging 29 seconds as opposed to 40 seconds when using a real credit or debit card.
Second, customers may stop carrying wallets and purses thanks to mobile payments. Many individuals think that this increases the security of business activity.
Although the research doesn't go into it, Zu believes that customers may end up with greater debt as a result of how simple mobile payments are.
Zu is not advocating that in order to stop overspending, we switch off our phones or uninstall payment programs. However, she believes that it's critical for customers to understand the possible behavioral shifts-such as a propensity to spend more recklessly-that mobile payment systems may enable.
This includes impulsive purchases made online and at checkout counters where customers can safely save their credit card details.
Impact of Mobile Payment Services on Consumer Spending
The rise of mobile payment services has streamlined transactions, offering unparalleled convenience. However, research led reveals a behavioral shift towards increased spending, attributed to the ease and speed of mobile transactions. With consumers charging an average of 9.4% more and making impulsive purchases online and in-person, it's evident that the convenience of tap-to-pay methods may inadvertently lead to financial repercussions. While mobile payments remain integral to modern commerce, it's essential for users to exercise mindfulness and awareness to avoid succumbing to overspending facilitated by these platforms.
