How cashless can lead to unhealthy consumption

The widespread use of cashless payments including credit cards, debit cards, and mobile apps has made transactions more convenient for consumers. However, results from previous research have shown that such cashless payments can increase consumers' spending on unhealthy food. "Why Do Cashless Payments Increase Unhealthy Consumption? The Decision-Risk Inattention Hypothesis," a newly published article in the Journal of the Association for Consumer Research, explains this phenomenon by showing how changes in bodily responses to cashless payments influence consumers responses.

Authors Joowon Park, Clarence Lee, and Manoj Thomas propose that cash and cashless payments elicit different levels of negative arousal when making shopping decisions. "Most people experience a spontaneous negative emotional response to the loss of wealth, particularly when such loss is concrete and vivid," the authors note. In contrast, when a person swipes a card or uses mobile payment, it is difficult to visualize the money changing hands. The payment occurs at a later date, which presumably does not entail a physical handover of money. "Because such transactions are not concrete," the authors write, "cashless payments are less likely to elicit the negative arousal that is appraised as the 'pain of paying.'"


Read more