Cashless payments are projected to become the norm in the near future, with online wallets like GCash gaining popularity. The widespread use of credit and debit cards also contributes to this shift towards cashless transactions. A recent study conducted by researchers from the University of Adelaide and University of Melbourne examined 71 published papers from 17 countries to analyze the impact of new payment methods on spending habits.
The study found that going cashless tends to increase spending compared to using physical currency. According to the researchers, paying for goods and services through platforms like GCash, using money transfers or QR codes, makes consumers more relaxed about their budgets. This behavior is attributed to the lack of physical money changing hands, leading to less memorable transactions and reduced “pain of paying.”
While the difference in spending between cash and cashless methods was small, it was more significant in cases of conspicuous consumption, where individuals purchase items to signal status. Surprisingly, the study revealed that cashless payments did not affect charitable giving or tipping amounts, as people donated similar amounts regardless of the payment method.
The researchers noted that positive economic conditions have a greater impact on the use of cashless payments, but this effect has slightly decreased over time. Despite the tendency of cashless transactions to boost spending, it is advised that individuals choose their payment methods carefully to control their expenses. Marketing researcher Lachlan Schomburgk from the University of Adelaide suggests carrying cash instead of cards as a way to avoid overspending.
