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

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and effect factors not linked to the same test samples and test reliability issues. Thomas et al. (2011) is an example of some of these issues. For example Thomas et al. (2011) use convenience samples and different population sets for their judgement group (identifying unhealthy products and potential impulse purchase behaviour) and their test groups. They also use mixed instrumentation and non-specification of cause–effect relationships. Participant characteristics (other than spendthrift/tightwad distinctions) are not gathered. Unrealistic scenarios - in Study Two students were told they are participating in a task designed to help a new supermarket store make merchandise decisions and were asked to shop in the online store - but on screen they were only allowed to choose from a set number of products in the healthy and the twenty unhealthy food categories. The use of smiley faces to identify pain is not an inherent issue - although reliability and validity aspects are not reported. Since the smiley face in essence measures happy-sad – it is not a ‘pain’ scale per se. Nevertheless the authors are at least trying to capture some emotional response. The problem lies with the item selection and validation of the word response test where respondents were ask to check whether they felt Irritated, Restricted, Powerless, Annoyed, Controlled, Suffocated, Inhibited or ‘none of these. No validity tests are reported, the words are biased toward negative associations and no associated tests between face scale and word scale are reported. 2.6: Payment Mode effects on Purchase Behaviour: Explanatory Theories Researchers have primarily used four theories to explain why the payment mode affects purchase behaviour: Mental Accounting (prospective & retrospective), Pain of Paying and Transparency. Though these are offered as distinct theories, they are related and may have a common explanatory base. 2.6.1: Mental Accounting and Payment Coupling The earliest explanation is mental accounting, described by Thaler (1980) as a “set of cognitive operations used by individuals and households to organise, evaluate and keep track of financial activities” (p.40). At the transaction level, people are said to tend to “open” an account mentally for each transaction and base their decision on evaluation of the perceived 23
enefit of consumption and the associated cost. These mental accounts help reduce the cognitive load on the decision makers. Over time people develop mental filters as a short cut to evaluate financial decision making. The assumption is that mental frames/filters influence the experience of paying by card and cash. A card-based payment mode decouples the payment from consumption – it removes the transparency so the sense that something of value has been transferred is dulled. Although similar to Prospect theory (proposes that people value gains and losses differently and, as such, will base decisions on perceived gains rather than perceived losses) mental accounting differs in that it can be applied to riskless situations; whereas prospect theory applies to chance or probabilistic settings, mental accounting exists independently of attitudes concerning risk (Keeney and Raiffa, 1976). Mental accounting theory is used in marketing literature to propose two related but conceptually different theories of “prospective accounting” and “retrospective accounting” that explain how payment mode influences purchase behaviour. Prelec and Loewenstein (1998) explain that when something is prepaid (and there is a delay between the payment and the consumption of the purchase) the acuteness (intensity) of the payment experience is reduced and this potentially increases the consumers’ evaluations of the net benefits of the transaction. They argue that specifically, thinking about the cost of payment at the time of purchase can undermine the pleasure derived from the items purchased and thinking about the benefits of a purchase can blunt the acuteness of the payment. They argue that this is a form of ‘decoupling’ and it is not dissimilar to that experienced when a credit card is used. This is in essence ‘prospective accounting’. At the time of the transaction payment is in the future. Their main thesis however is that this ‘decoupling’ affects the degree of payment acuteness, or in their understanding, the degree of pain experienced. Whilst still in the domain of mental accounting, Soman (2001) proposes retrospective theory to explain payment mode influences on spending behaviour. The theory involves mental accounting at the levels of the spending budget rather than at the point of purchase decision. The theory suggests that individuals have an idea of what they spend and whether their current spending is above or below the budget; that is, the role of budgeting on spending decision is driven by retrospection of past expenses. Individuals use their memory of past spending as a reference point to guide their current spending. Past payment reduces purchase 24
Page 1 and 2: Cash or Card: Consumer Perceptions
Page 3 and 4: Chapter Four: Research Design and M
Page 5 and 6: List of Figures Figure 6.1 Sree Plo
Page 7 and 8: List of Tables Table 6.1. Explorato
Page 9 and 10: Acknowledgement The research idea i
Page 11 and 12: Abstract This study examines the co
Page 13 and 14: the payment mode selected impacts o
Page 15 and 16: Identifying the exact origin of anc
Page 17 and 18: 1.5: Study Locus and Context The av
Page 19 and 20: compare participants normal or pref
Page 21 and 22: Chapter 2 provides a critical revie
Page 23 and 24: 2.2: The Emergence of the Money Con
Page 25 and 26: commodity (bullion) and issued the
Page 27 and 28: 2.5: Payment Mode and Purchase Beha
Page 29 and 30: and Belmont (1996) found that resta
Page 31 and 32: Households’ Spending’ run by th
Page 33: students (n=37) were also asked to
Page 37 and 38: associated with the purchase of ple
Page 39 and 40: A number of explanations for how pa
Page 41 and 42: 2.6.5: Summary As this review of th
Page 43 and 44: Questions one and two are based on
Page 45 and 46: and label" events and occurrences,
Page 47 and 48: Thaler (1998) asserts that mental a
Page 49 and 50: If this is so then it is the transp
Page 51 and 52: The Chapter contends that the payme
Page 53 and 54: In this chapter, the methodology fo
Page 55 and 56: solid data, the issue of generalisa
Page 57 and 58: the experience. To do this requires
Page 59 and 60: as participants managed to link the
Page 61 and 62: 4.4.2: Participant Selection There
Page 63 and 64: were initially examined via a test-
Page 65 and 66: set, in addition to the payment mod
Page 67 and 68: There are two major validity threat
Page 69 and 70: The Chapter commences by describing
Page 71 and 72: of all three projective tests. A fu
Page 73 and 74: However the negative thoughts diffe
Page 75 and 76: cold. It seems that money in the de
Page 77 and 78: thought the shoe (that was linked t
Page 79 and 80: Exhibit 5.6: Summary of findings $2
Page 81 and 82: denominations ($5, $10). On the oth
Page 83 and 84: Emotions (see Exhibit 5.7g) The mos
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� It is just when I can hear coin
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� I don’t feel that when I see
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Exhibit 5.7 (c) LIQUIDITY � if I
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Exhibit 5.8. Quotes for PMP Scale.
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82 Using cash to pay for purchases
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84 Using a debit card to pay for tr
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` 86 If I had a $20 note in my wall
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88 Chapter Six Development and Vali
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latent variable determines the obse
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oot (sqrt) was applied to normalize
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Exploratory Factor Analysis reveale
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96 Table 6.2: Inter-Item and Item-t
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98 Exhibit 6.5: 49 Item Scale in Pr
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6.4.2: Pre-Test Two - Internal Cons
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The 45 items were examined to facto
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6.4.4: Pre Test Two - Final Factor
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6.4.6: Assessing Construct Validity
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used to measure individual construc
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110 Exhibit 6.9: Pre-Test Items Rem
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Table 6.14: Summary of Final Result
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All dimensions (Table 6.16) show AV
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7.1: Chapter Overview 116 Chapter S
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Four product categories of househol
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Since the use of cash and debit car
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7.4.1.2: Control Group-Test Groups
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7.4.2: Proposition Two Evaluation T
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126 Table 7.8: Indulgence Food Prod
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128 Exhibit 7.2: Proposition Two: E
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130 Table 7.12: Comparisons of Fact
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Proposition Two that- where consume
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Table 7.13: Mean Item Score: Field
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Research Question One: Do the cogni
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token is used, perceptions and beha
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would spend it on something special
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8.4: Methodological Contribution Th
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144 � The priming regarding the s
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it may be prudent for governments,
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Bechara, A., & Damasio, A. (2005).
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Carruthers, B., & Babb, S. (1996).
Page 163 and 164:
Dohrenwend, B. P., Itzhak Levav, P.
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Garcia-Swartz, D., Hahn, W. R., & L
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Hair, J. F., Black, W. C., Babin, B
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Kassarjian, H. H. (1977). Content a
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Loix, E. Pepermans, R. Van Hove, L.
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Nielsen Research (2011, August) Nie
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Reimann & Bechara (2009) The somati
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Singh (2004) Impersonalisation of e
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Trent, J. & Smalley, G. (1992) The
Page 181 and 182:
Zelizer, V. (1994). The social mean
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its usage. This in turn points out
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Adam Smith proposed that money is s
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During the 1950s, researchers began
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use of borrowed money. The introduc
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Appendix 2: Projective Tasks- Workb
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TASK THREE For this activity you wi
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TASK SIX Shopping experience using
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Activity Two Tick five traits/chara
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Appendix 3: Moderator Guide When pa
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important. Individual opinions and
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192 Write few sentences describing
Page 205 and 206:
Appendix 5: Projective Tests- Theme
Page 207:
Appendix 7: Projective Tool (Debit
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