The Evolution of Payment Pain: Cash vs Cards

Research has historically shown that using cash causes psychological 'payment pain' leading to less spending compared to credit or mobile payments. Recent studies suggest this effect lessens over time, especially as cashless methods become more prevalent. Generational differences and digital notifications also alter perceptions of spending.

Research has consistently indicated that paying in cash triggers a psychological phenomenon known as 'payment pain,' resulting in consumers spending less compared to those using cards or mobile payment methods.

However, new studies suggest this effect is weakening, potentially due to consumers' increasing familiarity with cashless transactions and the influence of digital payment notifications.

The findings also highlight generational differences in spending habits, suggesting store managers might reconsider strategies about accepting cash and digital payment options to cater to evolving consumer behaviors.

(With inputs from agencies.)