The tap and go economy has undoubtedly made our shopping experience quicker and easier. But is speeding up the payment process at the checkout a convenience we’d be better off without?
The pleasure and pain of paying
Did you know buying things we like releases dopamine – the ‘feel-good’ neurotransmitters that activate the brain’s reward and pleasure centres? It’s no wonder self-control at the cash register is a challenge! But researchers using magnetic resonance imaging (MRI) technology have observed that the region of the brain associated with feelings of disgust also lights up when we make a purchase decision.
This suggests not only can we find it painful to pay for things, but this pain can be useful to help control spending. In other words, the pain of paying overrides the pleasure we get from the purchase. The problem? Newer, frictionless payment methods have helped us numb this pain.
Cash vs. credit
Perhaps unsurprisingly, people are generally willing to spend more money using a card than paying with cash.
These forms of payment feel less ‘real’, making it easier to spend and reducing the pain of paying. We’re happy to tap and go, but reluctant to break large denomination notes on small purchases.
Credit cards are thought to dull the pain of paying for two reasons: (1) there is a separation in time between when the credit card is used to buy something and when the bill has to be paid, and (2) using a credit card allows different purchases to be mixed together. So when the bill is actually paid (for example, once every month), we can’t readily attribute the payment to any one particular purchase.
In other words, the abstract nature of credit coupled with deferred payment may 'anaesthetise' us against the pain of paying.
Buy now, think later
Speeding up the payment process takes this further. By removing the need to pause for a moment to sign, put in your PIN or collect the receipt, we become increasingly disconnected from the act of spending.
Think about how often you buy something using your card, without really paying attention to how much it cost you.
It’s not just you. It’s been shown that individuals who pay by card have a less accurate recall of the amount paid than individuals who pay with cash. That’s a problem for the average shopper, because a precise recollection of past spending also influences our willingness to spend money in the future. The more you notice, the less you spend.
So, how can we be more mindful of our spending behaviour?
One way to increase the pain of paying is by using cash, especially big notes, rather than using cards, apps, or anything else that is not ‘real’. If you don’t want to be separated from your card or it’s just not practical, paying with debit rather than credit can help avoid unwanted debt. And next time you’re at the checkout? Slow down and remember that failing to pay attention can be an expensive habit.
About the author:
Dr Campbell Heggen is a behavioural researcher and financial planning academic at Deakin University. Campbell is a curious guy. Not satisfied with knowing what financial decisions people make, he wants to know why and how we make these decisions, so he researches what motivates and influences our behaviour.
Campbell is writing a series of articles for CareSuper exploring our attitudes and behaviours towards financial planning.
 Knutson, B., Rick, S., Wimmer, G. E., Prelec, D., & Loewenstein, G. (2007). Neural predictors of purchases. Neuron, 53(1), 147-156.
 Prelec, D. & Simester, D. (2001) Always Leave Home Without It: A Further Investigation of the Credit-Card Effect on Willingness to Pay. Marketing Letters, 12(5), pp.5-12.
 Prelec, D., & Loewenstein, G. (1998). The Red and the Black: Mental Accounting of Savings and Debt. Marketing Science, 17(1), 4-28.
 Raghubir, P., & Srivastava, J. (2008). Monopoly money: The effect of payment coupling and form on spending behavior. Journal of Experimental Psychology: Applied, 14(3), pp.213-225.
 Gafeeva, R., Hoelzl, E. & Roschk, H. (2017). What else can your payment card do? Multifunctionality of payment modes can reduce payment transparency. Marketing Letters, 29(1), pp.61-72.
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