Do Consumers Pay More Using Debit Cards than Cash

Emma Runnemark, Jonas Hedman, Xiao Xiao

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    We conduct an incentivized experiment to study the effect of the payment method on spending. We find that the willingness to pay is higher when subjects pay with debit cards compared to cash. The result is robust to controlling for cash-on-hand constraints, spending type, price familiarity and consumption habits of the products. The evidence thus suggests that different representations of money matters for consumer behavior. Such results further tease out the underlying mechanism of how payment methods influence spending behavior, which poses important implications for both consumers and merchants, as well as designing of digitalized payment in the future.
    TidsskriftElectronic Commerce Research and Applications
    Udgave nummer5
    Sider (fra-til)285–291
    Antal sider7
    StatusUdgivet - 2015


    • Payment Method
    • Debit Cards
    • Cash
    • Willingness-to-pay
    • Experiment