Ninety-two percent of transactions in Australia are now made with contactless payments, beating any previous records. But Jacqueline Park, co-founder of Carrot Money – an online app designed to help people save – states that it has become too easy to spend when the connection to physical payments is severed. Indeed, a study from the Sydney University found that consumers are 50% more likely to spend more than necessary when using anything other than cashMoney in physical form such as banknotes and coins. More.
Donnel Briley, professor of marketing and behavioral psychology at Sydney University confirmed that “there’s good empirical evidence that people spend more moneyFrom the Latin word moneta, nickname that was given by Romans to the goddess Juno because there was a minting workshop next to her temple. Money is any item that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular region, country or socio-economic context. Its onset dates back to the origins of humanity and its physical representation has taken on very varied forms until the appearance of metal coins. The banknote, a typical representati... More when they don’t actually have to use cash, and that goes across different alternative forms of paymentA transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. More.”
Similarly, in the UK, consumers admit to spending more when using contactless payments, but even more so when using mobile payments like Apple Pay. In fact, 72% of respondents of a ClearScore poll last year admitted to carrying out impulsive shopping sprees when using mobile payments.
How to avoid spending out-of-budget? Follow Briley’s advice: simply start taking out the amount of cash you need for a week, and stick to that budget.