The physical presence of money not only influences spending, but creates a strong sense of ownership. This is the result of research conducted in two different cultures and periods.
Using cash not only influences how much you spend, but also reinforces a deep sense of ownership that digital payments cannot replicate, says a study conducted at the University of Surrey (Great Britain). It suggests that maintaining cash may be key to maintaining moderation in spending. – The tangible nature of cash – its smell, touch and the act of counting – creates an emotional connection that digital payments lack. When we use cash, we don't just spend money. We also part with a part of ourselves, emphasizes Prof. Jashim Khan, author of the work published in the journal “Qualitative Market Research”.
“Cash is different”
His team conducted research in two different cultures and at different times – in New Zealand, in 2013 and in Chinain 2023. In surveys, researchers collected rich, detailed data on consumer experiences with cash and non-cash payment methods. Participants were asked, among others: to describe your feelings and behaviors related to the use of various forms of payment. First, research has shown that cash increases awareness of spending, while cards and apps often lead to a disconnection from the sense of value of the money spent. For example, in China, 50 percent all transactions are carried out via in-app payments and study participants showed a weakened sense of control over their finances. One participant noted: “Digital money doesn't feel like you're spending your own money. There's no sense of having money. Cash is different – you always feel like your money is getting smaller as you spend it.”
It turns out that “cash is not just money”
This sentiment emerged among respondents in both countries, highlighting the emotional weight that cash carries compared to its digital counterparts. Surveys have also shown that while people are satisfied and feel safe using payment apps, they struggle with a sense of loss when parting with cash. Emotional reactions that occur in response to cash transactions include sadness and guilt, reflecting a deeper psychological connection to physical money. In turn, the ease of digital payments often leads to mindless spending as the tangible nature of cash is replaced by abstract numbers on a screen. – Our research shows that cash is not just money – it is a way to maintain a connection with the resources we spend. Holding cash in our hands reminds us of its value, which is easy to forget when it comes to digital payments. As we use cashless methods more and more often, it is worth remembering the lessons that cash offers in terms of spending money wisely, says Prof. Khan. Prof. Khan stressed that his team is not arguing that cash is obsolete. He states that “on the contrary, we are rethinking how we view and manage money in a changing world.”
– The transition to a cashless society means we need to understand how different payment methods affect us not only financially, but also emotionally. This knowledge can help us make better financial decisions in a world where money often seems invisible, the expert emphasizes.
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