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

2.6.5: Summary
As this review of the payment mode literature shows, research is scarce and our knowledge
minimal. The introduction of the bank credit card in the 1970s ignited interest and a number
of studies ensued. Interest waned in the 1980s and 1990s but has been rekindled by the rapid
acceptance and use of electronic payment modes. The majority of the early credit-card studies
concentrate on identifying the characteristics of users; a handful examine the relationship
between payment mode usage and point of purchase decisions. Recent research has tended to
include debit-card use. A few of the studies examine user characteristics but the majority use
panel data to compare payment mode use with purchase outcomes. The test based research is
such that no definitive conclusions can be made, however the panel based studies show that
volume and value of purchases vary across modes, with the cash mode associated with the
lowest value (and volume) transactions. Although the panel (primarily supermarket purchase
data) shows that purchases vary across the payment modes it cannot be assumed that the
payment modes are driving the behaviour - it may well be a function of the transaction cost.
Much of the test based research is premised on the understanding that the electronic payment
modes lack transparency and so the intensity of the emotions experienced at the parting with
something of value is reduced, as is the ability to make accurate assessment of the cost-
benefit relationship. Researchers consider cash to be transparent as there is a clear
representation of the ‘amount’ being transferred but whether the test subjects also associate
the lack of transparency with their behaviour is not established. Underpinning the
transparency assumptions is the idea that the physical characteristics of the payment mode
affect judgements. That this assumption has merit lies with the principles that underpin
embodied cognition, the main principle being that our cognitions and emotions are shaped by
the body’s interaction with the world. So knowing what characteristics consumers identify
with payment modes, what cognitions and emotions link to these characteristics, and if and
how they relate these characteristics to their payment choices, is a useful undertaking.
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