6 ms·

Using your phone to pay can mean you'll spend more

33 points by redbell 3y ago

kylecazar 3y ago
Yeah, this was a primary goal of at least 'Click to Pay'. Lots of people abandon carts once they hit the screen that requires payment details because the 'wallet is too far away.'. Or requires registration, payment info capture, etc. Mobile wallet apps address the same convenience factor (as the article mentions). Another goal was to prevent merchants from getting and storing your payment information. So that's perhaps a plus. I worked on SRC (the EMV spec Click to Pay implements) at Amex.
- seszett 3y ago
  > Lots of people abandon carts once they hit the screen that requires payment details because the 'wallet is too far away.'. I don't know if it's just me, but I often "abandon" my cart once I hit the screen that requires payment details because I had to get there in order to see how much shipping I'm going to have to pay. Then I can do the whole process again with a few other stores until I can compare which of them gives me the best price. It's also often only on the payment screen that you can discover whether or not they even ship to your place.
  - seabass-labrax 3y ago
    Likewise with 'coupon codes' - they are usually supposed to be entered at the final stage before paying. You don't know if the coupon code has expired or whether it is valid for that shop until the last moment.
  - delfinom 3y ago
    I "abandon" carts because I was just dicking around and building a wishlist really. According to some market papers, this is stealing from the retailer or something. Lol
- thisislife2 3y ago
  It is not obvious to me why people are downvoting you for sharing your professional experience. Can somebody explain?
  - lxgr 3y ago
    People downvote personal experience, factually correct statements etc. all the time here. I also find it confusing. Best I can think of is that it somehow indicates disagreement with the state of the world that has brought about the experience or facts relayed...?
  - deleted 3y ago
    [deleted]
- godshatter 3y ago
  > A secondary goal was to prevent merchants from getting and storing your payment information. So that's perhaps a plus. Can Google or Apple see what is being purchased through those apps? I'm assuming not, but not knowing the answer to this has kept me using my credit card to tap with since that method doesn't add yet another company into the mix (at least as far as I know). Especially one, in the case of Google, whose main business model is selling my information to others or using it to target me for ads.
steelframe 3y ago
From TFA: "Technological advancements can offer us a lot of convenience and improve the security of financial transactions." As someone who works in security and privacy, it always stands out to me when the "and privacy" part is left off.
rockostrich 3y ago
It's not really clear from the article but I imagine that frictionless payments online contribute a lot more than physical ones. If you're making the decision between using a physical credit card and your phone then you've likely already committed to making the purchase. But it's a lot easier to back out when you're online. The option to use Apple or Google Pay on a website (even if you have your cards saved in the browser and it's just a few clicks to autofill) is so easy. To add to that, installment plans that are offered on pretty much every purchase nowadays just compound the problem.
- WaitWaitWha 3y ago
  Per my anecdotal experience, this is same with credit cards versus cash and before that checks/cheques versus cash had the same effect. The joke "I still have cheques, that means I still have money" or some variant, refers to this frictionless behavior. With lack of basic personal money management education, it is a permanent, lifelong indebtedness for a very large portion of the population.
Svip 3y ago
> It takes about 40 seconds to buy something with a physical credit card, compared to just 30 seconds to buy it with a smartphone. Looking at the linked paper, it suggests someone was able to make a cash payment in 5 seconds (see table 2). Where the closest of other methods would be a contactless card of about 21 seconds. Just have exact change in hand! Cash also has the highest time of 244 seconds.
- LtWorf 3y ago
  You can prepare the exact amount in cash while you're in line. Then it's 0.
  - DangitBobby 3y ago
    Not if you include the time for the cashier to verify the amount is correct and dismiss you.
    - LtWorf 3y ago
      You forget the network time for the transaction.
      - DangitBobby 3y ago
        I didn't claim paying with credit was 0 time.
  - roywiggins 3y ago
    This is quite tricky if you live somewhere that charges sales tax.
    - eternauta3k 3y ago
      Here the prices on the shelves include the tax.
      - 3y ago
Slava_Propanei 3y ago
[dead]
vouaobrasil 3y ago
It is interesting that the first thing society makes frictionless with technology is payments, easing consumerism. Perhaps we should have aimed to make other things frictionless, such as: seeking good medical and dental care, buying less disposable packaging, choosing products that are sustainable. Or what about spending time in nature? That should be easy for everyone with a safe and decent-sized park within walking distance of anyone's home. Nope, it's consumerism that we are easing. It goes to show you the true priorities of the techno-industrial society!
- Jean-Papoulos 3y ago
  All of these things (healthcare, buying products...) require money transfer. So by making payments frictionless, you're diminishing friction in these things too.
  - pasc1878 3y ago
    Healthcare does not require money transfer for the consumer. (Well in a non third world country).
    - helsinkiandrew 3y ago
      > Healthcare does not require money transfer for the consumer. (Well in a non third world country). I think the commenter was suggesting that by making health care frictionless people are more likely to use it. There is ultimately money going from consumer to health care provider - whether that's later with an invoice or indirectly via payments to insurance company and from them to the health provider (or taxes for a government provided healthcare). But if you don't have to get out your credit card on each doctors visit, people will go more often.
    - urda 3y ago
      Healthcare, and other issues you care about, are not immune to the laws of supply and demand just because you slapped your "this is important gang" sticker on it. Healthcare will always require money transfer.
jrmg 3y ago
The headline sounds like it means some places charge more to people paying with their phone. This is not what the article is about. The article is about how people are apparently buying more stuff because payment is easier.
- Joker_vD 3y ago
  I imagine not having to physically forking out the notes and coins from the one you have in your pocket/wallet, where you can literally see your money supply diminishing, also has something to do with that.
  - Liquid_Fire 3y ago
    That might be the case if we were comparing it to cash, but the article appears to be comparing it to card payment.
  - lxgr 3y ago
    I do believe that some people account for money that way, but for me it's the opposite: On my credit card statement or bank account, I can at the end of the month see in detail how much I've spent, broken down by category and merchant; with cash, it all just shows up as "ATM withdrawals" and I have no sense for where it all went.
    - Ylpertnodi 3y ago
      I use a budget/ spending tracker and even my cash spending is logged, which is really tedious but has reigned in my overspends. There's always a rounding error with cash (lost a coin, left some in the car etc) but I really surprised myself with some actual savings made. Even 50 cents for a cup of coffee 4 times a day adds up. I completely gave up coffee.
ericmay 3y ago
Are there any downsides to citizens to enact legislation requiring something like 1 price no matter the payment source? I.e. the same price whether you pay online, in-person, or whether you pay with a phone or through the web? I could see some differences with in-person versus online, or with difference prices for various locations, but why not charge the same whether you're using a phone or website? Maybe someone should create an app or some other technology that identifies the lowest cost payment method (web or mobile) and then sends that data as your user agent so you can get the lowest price.
- Kirby64 3y ago
  Increased cost to consumer, less margin for sellers, and perverse incentives. Amazon already does this with anything covered by Amazon fulfillment (you’re not allowed to have a lower advertised price anywhere else). This just means that more people are funneled to the easier method, because if it all costs the same why would they care? So Amazon gets more money, the seller gets less overall (worse margins on fulfillment orders), and Amazon’s monopoly is entrenched further.
  - ericmay 3y ago
    How would this increase costs? If I go to your website and a shoe costs X, and you see that I'm on a mobile phone so you raise prices X+y, and legislation dictates that you can't raise the price due to my browser profile, costs would go back to X. Maybe you could argue that costs rise for everyone because pricing is equal, but I don't see a problem with that, and there's a limit due to elasticity. I'm not talking about one guaranteed price, just that on a given website you can't charge more if I use Firefox, or if I'm browsing your site from an iPad.
    - Kirby64 3y ago
      Thats not an equivalent comparison though. Has nothing to do with browser profile, it has to do with using the services associated with the App Store. They’re more than just a payment processor, much like Amazon is more than just a payment processor. Right now you’re free to offer a discounted rate off the App Store, but you just can’t advertise it on the App Store app. In comparison, Amazon won’t even let you offer a lower price, which is worse for consumers. Likewise, forcing all prices to be the same raises prices uniformly since other vendors can’t offer a worse service (Eg slower shipping, in the case of Amazon) at a discounted price.
devsda 3y ago
This has been my personal experience as well. UPI payments in India have enabled seamless mobile payments through qr code scanning. Since the bank account is debited directly, it is difficult to get an idea of monthly spending until we check the account statement and it is easy to overspend. Ever since I've started using UPI lite which is a prepaid wallet that has limits on both max prepaid balance and max amount per transaction, I guess the extra friction and the very visible balance made me rethink some purchases.
- lxgr 3y ago
  Most banks I've used offer some sort of budgeting feature that lets you track where money is going in real time. Is that not common with Indian banks, or do the UPI bookings not happen in real time?
  - devsda 3y ago
    UPI is real time. Most banking applications do offer a feature to categorize card spends in a time period but not UPI as they are typically peer-to-peer transactions. If you mean envelope budgeting type feature, I'm not aware of any.
epstein 3y ago
I think it's because China is in deflation, so they simply want to spend more. Unlike the US and Europe with inflation and tipping culture, even though they pay with smartphones they still don't want to spend a lot of money.
- GrumpySloth 3y ago
  Shouldn’t deflation cause people to want to spend less? Spending deflating money is throwing out an appreciating asset. Japan used to suffer from long-term deflation and I’ve heard people there were generally frugal in reaction to that. Vice versa, holding on to money during inflation makes you just lose money, since tomorrow you won't be able to afford the things you can afford today.
wink 3y ago
This is such a weird article. At the shop: paying with a contactless card < 50 EUR takes 3s. Paying with maestro and slotting it and/or having to input a pin: maybe 10s. Fumbling with your phone if you don't use biometric unlocking: 15s if I am quick, probably more like 20. The only part I agree with is grabbing the physical card at my desk and inputting the numbers. Oh wait, I might have saved those numbers in my password manager, not even autocomplete in the browser. I dunno, maybe I'm just not the stereotypical consumer but I am only annoyed if it's not frictionless to pay. But it just makes me angry, not more frugal. And typing out all my details takes just as long as the payment method. But then I've never used OneClick-Pay on Amazon, so maybe I'm taking those 30s to think about impulse purchases anyway?

33 points by redbell 3y ago

Yeah, this was a primary goal of at least 'Click to Pay'. Lots of people abandon carts once they hit the screen that requires payment details because the 'wallet is too far away.'. Or requires registration, payment info capture, etc. Mobile wallet apps address the same convenience factor (as the article mentions). Another goal was to prevent merchants from getting and storing your payment information. So that's perhaps a plus. I worked on SRC (the EMV spec Click to Pay implements) at Amex.

seszett 3y ago
> Lots of people abandon carts once they hit the screen that requires payment details because the 'wallet is too far away.'. I don't know if it's just me, but I often "abandon" my cart once I hit the screen that requires payment details because I had to get there in order to see how much shipping I'm going to have to pay. Then I can do the whole process again with a few other stores until I can compare which of them gives me the best price. It's also often only on the payment screen that you can discover whether or not they even ship to your place.
- seabass-labrax 3y ago
  Likewise with 'coupon codes' - they are usually supposed to be entered at the final stage before paying. You don't know if the coupon code has expired or whether it is valid for that shop until the last moment.
- delfinom 3y ago
  I "abandon" carts because I was just dicking around and building a wishlist really. According to some market papers, this is stealing from the retailer or something. Lol
thisislife2 3y ago
It is not obvious to me why people are downvoting you for sharing your professional experience. Can somebody explain?
- lxgr 3y ago
  People downvote personal experience, factually correct statements etc. all the time here. I also find it confusing. Best I can think of is that it somehow indicates disagreement with the state of the world that has brought about the experience or facts relayed...?
- deleted 3y ago
  [deleted]
godshatter 3y ago
> A secondary goal was to prevent merchants from getting and storing your payment information. So that's perhaps a plus. Can Google or Apple see what is being purchased through those apps? I'm assuming not, but not knowing the answer to this has kept me using my credit card to tap with since that method doesn't add yet another company into the mix (at least as far as I know). Especially one, in the case of Google, whose main business model is selling my information to others or using it to target me for ads.

steelframe 3y ago

From TFA: "Technological advancements can offer us a lot of convenience and improve the security of financial transactions." As someone who works in security and privacy, it always stands out to me when the "and privacy" part is left off.

rockostrich 3y ago

It's not really clear from the article but I imagine that frictionless payments online contribute a lot more than physical ones. If you're making the decision between using a physical credit card and your phone then you've likely already committed to making the purchase. But it's a lot easier to back out when you're online. The option to use Apple or Google Pay on a website (even if you have your cards saved in the browser and it's just a few clicks to autofill) is so easy. To add to that, installment plans that are offered on pretty much every purchase nowadays just compound the problem.

WaitWaitWha 3y ago
Per my anecdotal experience, this is same with credit cards versus cash and before that checks/cheques versus cash had the same effect. The joke "I still have cheques, that means I still have money" or some variant, refers to this frictionless behavior. With lack of basic personal money management education, it is a permanent, lifelong indebtedness for a very large portion of the population.

Svip 3y ago

> It takes about 40 seconds to buy something with a physical credit card, compared to just 30 seconds to buy it with a smartphone. Looking at the linked paper, it suggests someone was able to make a cash payment in 5 seconds (see table 2). Where the closest of other methods would be a contactless card of about 21 seconds. Just have exact change in hand! Cash also has the highest time of 244 seconds.

LtWorf 3y ago
You can prepare the exact amount in cash while you're in line. Then it's 0.
- DangitBobby 3y ago
  Not if you include the time for the cashier to verify the amount is correct and dismiss you.
  - LtWorf 3y ago
    You forget the network time for the transaction.
    - DangitBobby 3y ago
      I didn't claim paying with credit was 0 time.
- roywiggins 3y ago
  This is quite tricky if you live somewhere that charges sales tax.
  - eternauta3k 3y ago
    Here the prices on the shelves include the tax.
    - 3y ago

Slava_Propanei 3y ago

[dead]

vouaobrasil 3y ago

It is interesting that the first thing society makes frictionless with technology is payments, easing consumerism. Perhaps we should have aimed to make other things frictionless, such as: seeking good medical and dental care, buying less disposable packaging, choosing products that are sustainable. Or what about spending time in nature? That should be easy for everyone with a safe and decent-sized park within walking distance of anyone's home. Nope, it's consumerism that we are easing. It goes to show you the true priorities of the techno-industrial society!

Jean-Papoulos 3y ago
All of these things (healthcare, buying products...) require money transfer. So by making payments frictionless, you're diminishing friction in these things too.
- pasc1878 3y ago
  Healthcare does not require money transfer for the consumer. (Well in a non third world country).
  - helsinkiandrew 3y ago
    > Healthcare does not require money transfer for the consumer. (Well in a non third world country). I think the commenter was suggesting that by making health care frictionless people are more likely to use it. There is ultimately money going from consumer to health care provider - whether that's later with an invoice or indirectly via payments to insurance company and from them to the health provider (or taxes for a government provided healthcare). But if you don't have to get out your credit card on each doctors visit, people will go more often.
  - urda 3y ago
    Healthcare, and other issues you care about, are not immune to the laws of supply and demand just because you slapped your "this is important gang" sticker on it. Healthcare will always require money transfer.

jrmg 3y ago

The headline sounds like it means some places charge more to people paying with their phone. This is not what the article is about. The article is about how people are apparently buying more stuff because payment is easier.

Joker_vD 3y ago
I imagine not having to physically forking out the notes and coins from the one you have in your pocket/wallet, where you can literally see your money supply diminishing, also has something to do with that.
- Liquid_Fire 3y ago
  That might be the case if we were comparing it to cash, but the article appears to be comparing it to card payment.
- lxgr 3y ago
  I do believe that some people account for money that way, but for me it's the opposite: On my credit card statement or bank account, I can at the end of the month see in detail how much I've spent, broken down by category and merchant; with cash, it all just shows up as "ATM withdrawals" and I have no sense for where it all went.
  - Ylpertnodi 3y ago
    I use a budget/ spending tracker and even my cash spending is logged, which is really tedious but has reigned in my overspends. There's always a rounding error with cash (lost a coin, left some in the car etc) but I really surprised myself with some actual savings made. Even 50 cents for a cup of coffee 4 times a day adds up. I completely gave up coffee.

ericmay 3y ago

Are there any downsides to citizens to enact legislation requiring something like 1 price no matter the payment source? I.e. the same price whether you pay online, in-person, or whether you pay with a phone or through the web? I could see some differences with in-person versus online, or with difference prices for various locations, but why not charge the same whether you're using a phone or website? Maybe someone should create an app or some other technology that identifies the lowest cost payment method (web or mobile) and then sends that data as your user agent so you can get the lowest price.

Kirby64 3y ago
Increased cost to consumer, less margin for sellers, and perverse incentives. Amazon already does this with anything covered by Amazon fulfillment (you’re not allowed to have a lower advertised price anywhere else). This just means that more people are funneled to the easier method, because if it all costs the same why would they care? So Amazon gets more money, the seller gets less overall (worse margins on fulfillment orders), and Amazon’s monopoly is entrenched further.
- ericmay 3y ago
  How would this increase costs? If I go to your website and a shoe costs X, and you see that I'm on a mobile phone so you raise prices X+y, and legislation dictates that you can't raise the price due to my browser profile, costs would go back to X. Maybe you could argue that costs rise for everyone because pricing is equal, but I don't see a problem with that, and there's a limit due to elasticity. I'm not talking about one guaranteed price, just that on a given website you can't charge more if I use Firefox, or if I'm browsing your site from an iPad.
  - Kirby64 3y ago
    Thats not an equivalent comparison though. Has nothing to do with browser profile, it has to do with using the services associated with the App Store. They’re more than just a payment processor, much like Amazon is more than just a payment processor. Right now you’re free to offer a discounted rate off the App Store, but you just can’t advertise it on the App Store app. In comparison, Amazon won’t even let you offer a lower price, which is worse for consumers. Likewise, forcing all prices to be the same raises prices uniformly since other vendors can’t offer a worse service (Eg slower shipping, in the case of Amazon) at a discounted price.

devsda 3y ago

This has been my personal experience as well. UPI payments in India have enabled seamless mobile payments through qr code scanning. Since the bank account is debited directly, it is difficult to get an idea of monthly spending until we check the account statement and it is easy to overspend. Ever since I've started using UPI lite which is a prepaid wallet that has limits on both max prepaid balance and max amount per transaction, I guess the extra friction and the very visible balance made me rethink some purchases.

lxgr 3y ago
Most banks I've used offer some sort of budgeting feature that lets you track where money is going in real time. Is that not common with Indian banks, or do the UPI bookings not happen in real time?
- devsda 3y ago
  UPI is real time. Most banking applications do offer a feature to categorize card spends in a time period but not UPI as they are typically peer-to-peer transactions. If you mean envelope budgeting type feature, I'm not aware of any.

epstein 3y ago

I think it's because China is in deflation, so they simply want to spend more. Unlike the US and Europe with inflation and tipping culture, even though they pay with smartphones they still don't want to spend a lot of money.

GrumpySloth 3y ago
Shouldn’t deflation cause people to want to spend less? Spending deflating money is throwing out an appreciating asset. Japan used to suffer from long-term deflation and I’ve heard people there were generally frugal in reaction to that. Vice versa, holding on to money during inflation makes you just lose money, since tomorrow you won't be able to afford the things you can afford today.

wink 3y ago

This is such a weird article. At the shop: paying with a contactless card < 50 EUR takes 3s. Paying with maestro and slotting it and/or having to input a pin: maybe 10s. Fumbling with your phone if you don't use biometric unlocking: 15s if I am quick, probably more like 20. The only part I agree with is grabbing the physical card at my desk and inputting the numbers. Oh wait, I might have saved those numbers in my password manager, not even autocomplete in the browser. I dunno, maybe I'm just not the stereotypical consumer but I am only annoyed if it's not frictionless to pay. But it just makes me angry, not more frugal. And typing out all my details takes just as long as the payment method. But then I've never used OneClick-Pay on Amazon, so maybe I'm taking those 30s to think about impulse purchases anyway?