People who pay by card forget how much they spent: study

Bs_logoImage
Press Trust of India Berlin
Last Updated : Nov 12 2017 | 4:42 PM IST
Swiping your card to make payments? You are less likely to remember how much you spent, say scientists who found that cashless transactions make it easier for people to lose track of their expenditures.
According to current estimates, about three billion new so-called smart cards will be issued across the globe in 2017.
Scientists at the University of Cologne in Germany and the Alpen-Adria-Universitat Klagenfurt in Austria have recently examined the effect these shifting payment methods are having on the customers.
They carried out a field study to determine recall accuracy in relation to recently made payments.
Data was gathered at two separate time points in cafeterias at a German university; the first time point was during the summer of 2015, and then again during the summer of 2016 after a multifunctional card was introduced.
Researchers were able to analyse guided interviews, which were conducted with a total of 496 students immediately after the act of paying.
"We were able to show that individuals who pay by card have a less accurate recall of the amount paid than individuals who settle their bill with cash," they said.
The transparency of spending money depends on the mode of payment used - cash, single-function cards that offer only a payment function, or multifunctional cards which may also include bonus programmes, user identification or other functions.
"Individuals who use the non-payment functions of the multifunctional card are less likely to remember the transaction details accurately."
These results are relevant for the financial wellbeing of everyone.
"A precise recollection of past spending has an effect on the willingness to spend money in the future," researchers said.

Disclaimer: No Business Standard Journalist was involved in creation of this content

Subscribe to Business Standard digital and get complimentary access to The New York Times

Smart Quarterly

₹900

3 Months

₹300/Month

SAVE 25%

Smart Essential

₹2,700

1 Year

₹225/Month

SAVE 46%

Super Saver

₹3,900

2 Years

₹162/Month

Subscribe

Renews automatically, cancel anytime

Here’s what’s included in our digital subscription plans

Access to Exclusive Premium Stories Online

  • Over 30 behind the paywall stories daily, handpicked by our editors for subscribers

Complimentary Access to The New York Times

  • News, Games, Cooking, Audio, Wirecutter & The Athletic

Business Standard Epaper

  • Digital replica of our daily newspaper — with options to read, save, and share

Curated Newsletters

  • Insights on markets, finance, politics, tech, and more delivered to your inbox

Market Analysis & Investment Insights

  • In-depth market analysis & insights with access to The Smart Investor

Archives

  • Repository of articles and publications dating back to 1997

Ad-free Reading

  • Uninterrupted reading experience with no advertisements

Seamless Access Across All Devices

  • Access Business Standard across devices — mobile, tablet, or PC, via web or app

More From This Section

First Published: Nov 12 2017 | 4:42 PM IST