Will Mobile Payment Platforms Elongate Your Expense SheetsPublished Date: April 21, 2020 |
Mobile payments offer great convenience to consumers. However being a sophisticated and handy platform, speculations suggest that this might facilitate reckless spending as well.
It is a well-documented fact that when you are not paying with hard cash for your purchase, the psychological awareness related to your expenses decrease. In other words, you spend more recklessly.
Research has found that consumers tend to spend more money with a credit card than with cash or a debit card, and the expectation is that new mobile payment tools such as Apple Pay and Google Wallet may have a similar, if not worsening effect.
Reportedly in a study at MIT, MBA students were offered a chance to bid on tickets to a sold-out Boston Celtics game. The ones who could pay with a credit card were willing to pay twice as much as those who would have had to go to the ATM and pay with cash.
When one is spending with cash, they see the pain of paying with their hard-earned money, because now they can see the money physically leaving their wallet. That’s because using cash allows consumers to “see” and better track their expenses, something they don’t experience with a credit card—or a smartphone.
However, as a silver lining, it is expected that mobile apps will soon be smart enough to do regular budgetary work and suggest if one should buy a product. These apps might ultimately do the best job of all at curbing the appetite to overspend, and researchers and financial companies are already at work on the effort.
Intervention is the key and several firms and individuals around the world are planning to research and develop an app that could help consumers set budgets and stick to them. This could potentially further expand to other human behavior, such as in personal healthcare and hygiene, where external analysis can be very helpful.
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