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

For more than a decade, there have been several attempts to integrate ‘smart card
technology’ into ‘mobile devices’ to enable mobile payments for business to consumer (B2C)
payment transaction processing. In the era of third generation (3G) mobile network, mobile
payment is imminent. Many European and Asian countries, including Korea, Singapore, and
Japan have adopted this technology (Pousttchi, Sciessler, and Wiedemann, 2009). It is
emerging in North America. In Japan, it is possible to pay for a vending machine snack by
simply dialing a number on one’s mobile phone and having the amount charged to one’s
phone bill. In recent times, the mobile phone is increasingly used to purchase digital content
(e.g. ringtones, music, apps, or games), tickets, parking fees and transport fares in many
economically developed nations just by flashing the mobile phone in front of the scanner at
‘manned’ or ‘unmanned payment centres.
Although a ‘cashless’ society has a number of advantages, social commentators and
environmental activists have expressed concerns that it would increase overall consumption,
increase personal debt levels, reduce savings and that the resultant ‘over-consumption’ will
have an adverse impact on the society and environment (Nocera, 1994; Libow, 1955; Tilford,
2000; Zavestoski, 2002; and MacDonald Oates,Young and Hwang, 2006). Whether over-
consumption can be entirely attributable to a cashless society is uncertain. A common lay
explanation for over-consumption is that people get into financial difficulties through treating
as necessities, goods whose only function is social display. Walker, Lea and Webley (1992)
found that people with serious debt problems regarded certain kinds of expenditures on
children (for example fashion goods and substantial Christmas gifts) as necessities, and
would run into debt in order to maintain them, even though gifts are inherently luxurious
(Gilliz and Belk, 1996) , “One specific claim is that some consumers have self-control
problems; therefore they spend more regardless of mode of payment, save less and embark on
a consumption path that is unsustainable to self and as a whole to society (Garcia-Swartz,
Daniel, Hahn and Layne-Farrar, 2007; O’Guinn and Faber, 1989). Though this may be the
case, the positive relationship between access to credit and consumption levels is well
documented (Durkin and Staten, 2002; Manning, 2000) Therefore it may be that the
increased spend per transaction, observed in the credit card based studies, may be due to the
availability of credit and not just to the ‘cashless’ factor. This does not negate a possible
decoupling effect, but the credit factor in the transaction payment should be isolated for this
to ascertain.
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