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

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intention when payment mode requires the consumer to write down the amount paid (e.g. cheque) or is highly transparent (e.g. cash) and when the consumer’s wealth is depleted immediately rather than with a delay. Credit cards lack transparency, causing underestimation of past spending, and decoupling of payment from consumption. 2.6.2: Pain of Paying Zellermayer (1996) coined the term ‘pain of paying’ to refer to the emotion consumers experience in parting with money. He posited that this psychological pain of paying acts as a regulatory or monitoring mechanism by sending an instant signal about the potential ramifications of spending. His notion of pain is that it describes the degree of annoyance experienced with the parting of money. The aim of his study was to ascertain what sorts of purchases afforded the most annoyance when the bill for the purchase is presented for paying and if the degree of pain affected how soon one was prepared to settle the bill and if the payment mode use, ameliorated the pain. Zellermayer conducted four separate but related studies, however for this present study; Zellermayer’s fourth study is the most relevant (Zellermayer 1996:61-68). In the fourth study he provided subjects with 50 bill payment situations and asked them to indicate how painful (annoying) and how pleasurable the purchase type/situation felt on an eleven point scale (pain = -5 and pleasure = 5, the mid- point is 0) and then asked subjects to indicate how they would like to pay- cash, cheque, credit card direct debit (bank deduction). Exhibit 2.1: Zellermayer 1996:66 Payment mode choice based on degree of pain- pleasure associated with the purchase Pain/Pleasure Cash Cheque Credit Direct Totals Card Debit Pain = -5 Pleasure= 5 % % % % % -5 to -3 10.9 61.4 13.6 14.2 100 -2 to 2 18.1 51.5 22.0 8.6 100 3 to 5 21.4 44.8 29.6 4.2 100 Totals 17.2 52.4 21.5 8.9 100 He found that for purchases deemed painful (one presumes unpleasant), the preferred mode of payment was direct debit or cheque (more likely cheque) and that credit cards and cash are 25
associated with the purchase of pleasurable purchase types. Zellermayer (1996) suggests that “choosing when to pay an expense is a relatively unique task that requires subjects to actually look inward and reveal their preferences. Choosing how to pay, on the other hand, is highly routine and more likely to be determined by habit than by immediate pain or pleasure considerations. He argues that this is so “because different payment modes are “ubiquitous, subjects may have revealed their memorised or programmed responses by associating each expense with its typical, rather than emotionally-preferred, payment mode; a pain of paying effect, then, ceases to exist” (Zellermayer, 1996:67). As such, Zellermayer’s study does not examine the degree of pain associated with the use of cards or cash so his work is not a clear indication that the use of cash inherently causes pain to be experienced. This is interesting, as underpinning much of the assumptions underpinning the transparency explanation is the notion that an electronic payment mode reduces the degree of pain experience. 2.6.3: Transparency Soman (2003) proposed that the explanation of these findings lies with the notion of ‘Transparency’. He defines payment transparency as “the relative salience of payment, both in terms of physical form and the amount” (p. 175). Cash is the most transparent form of payment in that the purchaser sees exactly what amount of money is being transferred. Card- based modes have low transparency. He argues that high transparency correlates positively with the degree of pain experienced when paying for products (he borrows Zellermayer’s term ‘pain of paying’). He does not examine the degree of pain-pleasure associated with the type of products purchased afford the subjects, and merely assumes that a high degree of transparency, i.e., the use of cash equates positively with the degree of pain experienced. Essentially he reports on the behaviours associated with the use of smart cards versus cash in three contexts - making photocopies, laundromat use and supermarket purchases. Photocopying: Soman (2003) found that participants using a photocopy card (M = 114.5) made more copies compared to those who used cash to pay for photocopying (M = 77.25). Laundromat use: Those who used laundromat pre-paid cards separated their laundry loads in whites and colour and used the washing machine for longer periods (Soman 2003). Cash users were more efficient and used the full capacity of the washing machine. He suggests that participants were more willing to separate laundry when the payment 26
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 and 34: students (n=37) were also asked to
Page 35: enefit of consumption and the assoc
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
Page 85 and 86: � It is just when I can hear coin
Page 87 and 88:
� 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
Page 99 and 100:
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
Page 105 and 106:
Exploratory Factor Analysis reveale
Page 107 and 108:
96 Table 6.2: Inter-Item and Item-t
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98 Exhibit 6.5: 49 Item Scale in Pr
Page 111 and 112:
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
Page 203 and 204:
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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