Time to Cut Up Those Debit Cards? Effect of Payment Mode on Willingness to Spend

Moore, Amy; Taylor, Michael R.

doi:10.1007/s10603-011-9172-7

Cited by 12 publications

(9 citation statements)

References 14 publications

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“…Consistent with Feinberg's study 2 (1986), later studies have provided support that credit cards were related to a higher WTP (Monger and Feinberg, 1997;Moore and Taylor, 2011;Prelec and Simester, 2001;Raghubir and Srivastava, 2008). Monger and Feinberg (1997) found that participants displayed a higher WTP in the credit card condition, as compared to those in the cash and check conditions.…”

Section: Payment Methods and Spending Behaviorsupporting

confidence: 55%

“…Monger and Feinberg (1997) found that participants displayed a higher WTP in the credit card condition, as compared to those in the cash and check conditions. Similarly, both debit and credit cards resulted in a higher WTP as compared to cash (Moore and Taylor, 2011). Although the credit card effect on the WTP has been replicated in prior studies, there have also been several studies that (at least partially) did not replicate this effect (Hunt et al, 1990;Lie et al, 2010;Shimp and Moody, 2000).…”

Section: Payment Methods and Spending Behaviormentioning

confidence: 89%

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A replication study of the credit card effect on spending behavior and an extension to mobile payments

Liu

Dewitte

2021

Journal of Retailing and Consumer Services

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Section: Payment Methods and Spending Behaviorsupporting

confidence: 55%

Section: Payment Methods and Spending Behaviormentioning

confidence: 89%

A replication study of the credit card effect on spending behavior and an extension to mobile payments

Liu

Dewitte

2021

Journal of Retailing and Consumer Services

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“…Several scholars have focused on the impact of cash and card payments on consumer behavior (Mishra, Mishra, & Nayakankuppam, 2006; Shimp & Moody, 2000; Soman, 2003; Thomas et al, 2011), especially on the WTP (Chatterjee & Rose, 2012; Feinberg, 1986; Gafeeva, Hoelzl, & Roschk, 2018; Moore & Taylor, 2011; Prelec & Loewenstein, 1998; Prelec & Simester, 2001; Raghubir & Srivastava, 2008; Runnemark, Hedman, & Xiao, 2015; Zellermayer, 1996). Specifically, comparing card payments, people were more sensitive to the price and willing to pay less for the same product when using cash payments.…”

Section: Introductionmentioning

confidence: 99%

The effects of mobile payment on consumer behavior

Liu

Luo

Zhang

2020

J of Consumer Behaviour

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With the advancement of technology and diversification of payment methods, mobile payment methods have gradually replaced traditional cash payments and become the mainstream payment mode. Although mobile payment is more convenient, is it faster than cash payment when their physical differences are controlled? Does it affect consumer behavior? We designed two studies to explore these questions. In Study 1, we required 192 participants to physically pay by cash or mobile phone and measured their willingness to pay (WTP). In Study 2, we compared the speed of the two payment methods when the physical differences between them were eliminated and measured consumers' willingness to buy from 46 students. Our results indicated that the effect of mobile payment, which increases WTP, also applies to specific products, and it does not occur if the money is a gift, as opposed to if it is earned. Moreover, when the process of cash payment is made as easy as mobile payment, people still spend less time on mobile payments than cash payment, and mobile payment effect is impacted by payment time. The above results supplement the evidence that payment methods have an impact on consumer behavior, and provide consumers, merchants, and regional managers with suggestions on payment methods. | INTRODUCTIONThe era of "cashless transactions" is approaching. With the popularity of mobile phones and third-party payment applications, mobile payment has gradually replaced cash payments globally, becoming the mainstream payment method in daily life (Pickford, 2015). Moreover, the Bank for International Settlements (BIS) (2020) pointed out in its latest annual economic report that the payment industry has been greatly affected by the pandemic, accelerating digital payment transformation and the growth of mobile payment scale. Karnouskos (2004) defines mobile payment as the use of a mobile device to initiate, activate, and/or confirm a payment, including online and offline transactions. Mobile payment in offline transactions specifically refers to a settlement method, wherein consumers pay for goods or services in offline facilities (e.g., shopping malls and convenience stores) through payment technologies (e.g., scan code) of mobile payment terminals (e.g., smartphones).Mobile payment services in the market have grown rapidly.Mobile payment market worldwide is projected to grow by US $362.4 billion, driven by a compounded growth of 39.1% (Report Linker, 2019). Given their political agenda, some countries (e.g., India, China) have realized leapfrog development from cash to mobile payments (Beyes & Bhattacharya, 2017). Additionally, the pandemic has highlighted shortcomings in contact payments (e.g., cash and card payments), which may become carriers of virus transmission. Therefore, mobile payment, as a contactless payment method, is favored. Statistics show that in September 2019 (BIS, 2020), share of contactless accounted for 27% in all card-present transactions by a global card network, and it rose to more than 33% in just 6 months. Many coun...

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“…The exact difference in amount of spending between credit card 'users' and the control group has been dubbed the credit card premium. More up to date research has examined the analogue effect of debit cards on willingness to spend (Moore and Taylor, 2011). Somewhat contrary to their expectations, these authors found that exposure to debit card logos also produced an increased willingness to spend in much the same manner as credit cards did.…”

mentioning

confidence: 72%

Research Note: Does Method of Payment Affect Total Trip Expenditure?

Thrane

2015

Tourism Economics

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Method of payment -debit card, credit card or cash -is known to affect consumer spending on various items. The purpose of this study is to scrutinize the relationship between the method of payment and the total trip expenditure of Norwegian winter tourists. There are two main findings: (a) credit card and debit card users -the so-called 'plastic money' segments -spend more money in total on their trip than cash users; (b) of the two plastic money segments, credit card users are the bigger spenders. The scholarly and strategic implications are offered.

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Time to Cut Up Those Debit Cards? Effect of Payment Mode on Willingness to Spend

Abstract: Debit cards, Credit cards, Willingness to spend, Consumer behavior, Consumer policy,

Cited by 12 publications

References 14 publications

A replication study of the credit card effect on spending behavior and an extension to mobile payments

A replication study of the credit card effect on spending behavior and an extension to mobile payments

The effects of mobile payment on consumer behavior

Research Note: Does Method of Payment Affect Total Trip Expenditure?

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