Cash or Card: Consumer Perceptions of Payment Modes - Scholarly ...

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The distinct differences in cognitive responses include the following:
� When cash is used there is a heightened awareness that something of value is being
transferred.
� More effective transaction value computing (consciously and unconsciously) when
cash is used.
� Better money management and spending control.
� Small denomination notes were considered ‘spent’. In essence, once it is removed
from a savings account it is essentially ‘mentally spent’.
� When a debit card is used the awareness that something of value is being transferred
is low especially when paying for low-cost items such as snacks, bus-fares and take-
away meals. When cash is used the participants saw it disappearing; but with the
card, the reality of the expenditure only hits when the bank statement arrives.
� When given an absolute amount (e.g., $100) to spend, for their supermarket purchases
the majority (slightly more for the cash payment mode) report the use of a calculator
and planning irrespective of payment mode used. However the temptation to
‘overdraw’ on the card is omnipresent.
� Impulse purchases were thought to increase when the debit card is used.
� A reluctance to carry cash for fear of loss and so deemed the card as the ‘safer’ mode;
awareness of electronic fraud was relatively low.
This thesis suggests that the physical characteristics of the payment mode used, affects
consumers’ perceptions and behaviours. Explanation as to why this should be so is based on
the notion that the mind is inherently embodied because its processes must be neutrally
instantiated and because our perceptual and motor systems play a foundational role in
concept definition and in rational inference (Anderson, 2003:105). The underlying premise is
that the inherent physical differences of both – the visual representation of value with the
cash token and the ‘access’ feature of the card coupled with varied historical associations
(electronic cards are a relatively recent technology), affects perceptions and thus behaviours
associated with the use of each.
Given the historic use of cash, it is most likely that people have developed an established set
of responses to the cash token (the stimulus), i.e., a cognitive bias. This set of responses
functions as anchor points (reference points) that direct perceptions and behaviour when the