ZAP
Study led by manager warns of the importance of having notes and coins in your wallet: they have psychological advantages over the very subtle (and dangerous) credit cards and one-click payments.
Contactless card, MBWay… just pull over and that’s it. Nothing leaves (physically) the wallet and we get what we want, almost like magic.
Sometimes we seem even more blind online, with our Paypal, Apple Pay, Google Pay accounts or card details ready to pay for a good or service. They are useful tools that make our lives easier — but can encourage excessive spending.
By taking the psychological weight of financial decisions away from us, simple transactions take control of our spending in certain situations, concludes a study in October in Qualitative Market Research.
The investigation, led by the director of international business management, Jashim Khan, warns of the stronger emotional response to paying in cash — sadly, but above all culpa noise — which contrasts greatly with the abstract act of touching a card or touching a screen.
Deep down, it hurts us to see a 20 euro note leave our hands to pay for a temporary lunch, which we will forget that same afternoon. But despite being uncomfortable, these emotions help keep us financially disciplined.
The associate professor of marketing at the University of Surrey’s research spanned two decades and two continents. In 2013, focus groups in New Zealand reflected on their payment habits, and a similar study conducted in China in 2023 corroborated the findings.
Participants who paid in cash reported feeling a greater sense of loss: they valued money more when they felt it in their hands. On the other hand, digital payment methods have often enabled a “mindless” mode of spending, in which the immediate emotional impact has been considerably reduced or even non-existent.
Os Portuguese people must know this feeling well: they are among those who “stop” the most to paysecond only to the United Kingdom (69%) and Spain (72%), according to the XIII Payment Methods Trends Report from Minsait Payments, an entity of the Indra group.
In 2023, debit cards dominated face-to-face purchases in Portugal, with 42.4%, and there was a significant inclination towards immediate transfers for online payments, with a preference rate of 44.7%: cash payment “is losing strength” and neobanks gaining traction.
Gen Z, in particular, has embraced mobile payments, especially with their smartphones. While millennials express a deeper emotional connection to money, Gen Z is less affected by the act of spending.
“A surprising observation from our research is that Gen Z tends to form a psychological relationship with the apps where they keep their money,” Khan tells . “In contrast, millennials feel a deeper emotional connection to money. For them, separating themselves from money is like separating themselves from a part of themselves”, he explains.
Companies are also increasingly moving towards cashless operations. The pandemic changed the gameat a time when fears of contagion have led many retailers to adopt contactless payment systems.
In the online world, large platforms have simplified expenses even further and made shopping easier than ever, just a click away. But spending without hassles comes at a cost: greater financial errors.
To counter this trend, the author proposes the regular control of bank accounts and maintaining a expense diary.
And remember: feeling discomfort can be positive, as it acts as a guarantee that expenses are in line with financial limits.
