The psychology of paying

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A wad of cash – once cherished by some as the ultimate symbol of wealth – is losing favour as we move to an increasingly cashless society.

In 2006, 62% of all payments in the UK were made with cash, but that was down to 40% by 2016 and is predicted to fall even further – to 21% – by 2026, according to the trade association UK Finance. It said that, in 2018, debit cards overtook cash as the most frequently used payment method.

Contactless cards were introduced in 2007 and these payments have subsequently become increasingly prevalent – but does a different payment choice affect the way people spend money?

This has been studied by Hong Kong-based academics Eric See-To and Eric Ngai, who considered four main areas: spending behaviour; the psychology of consumption; perceptions of payment technology; and the payment mechanism. In their empirical study, they looked at spending among people in supermarkets across three types of payment: cash, ...