The Covid-19 pandemic has seen a huge rise in cashless payments as society has attempted to limit the contact between people as much as possible.  A new study from the University of Chicago explores whether this also influences our spending patterns, and especially our spontaneous purchases.

“Most people experience a spontaneous negative emotional response to the loss of wealth, particularly when such loss is concrete and vivid,” the researchers explain.

By contrast, when we use a cashless payment, it’s harder to visualize the money that is changing hands.  What’s more, the payment usually occurs at a later date, and because this is less concrete, it’s perhaps less likely to elicit the negative emotional response we get with physical cash.

Aroused shopping

It’s widely established that arousal plays a big role in our likelihood of engaging in risky behaviors, and so the researchers suggest that the lower arousal caused by cashless payments are likely to increase our likelihood of making risky purchases, such as buying junk food.

Volunteers were invited to a lab for a simulated grocery experiment.  Some of the volunteers were asked to imagine making payments with cash, others with a card.  Each participant wore a device on their hands that measured changes in their arousal level.

The analysis revealed that the volunteers who were making cashless payments generally had lower arousal than those thinking of using cash.  This in turn made those using cash pay more attention to the health risks of the grocery items they were buying, so their shop was generally healthier than those paying with a card.

A second experiment revealed similar results, with shoppers using cashless payments more likely to buy more expensive desserts than those using cash.  Interestingly, this gap was widest among the volunteers with the highest education levels, with the authors arguing that these people would be most aware of the health implications of their purchases.

The next step is to see whether these findings can be replicated in a range of other scenarios.  For instance, do they also hold when we’re buying things online?

“Compared to brick-and-mortar shoppers, would shoppers in Amazon’s cashless stores be more willing to try radically new products because of lower risk sensitivity?” the researchers explain. “If casinos start giving out chips on mobile apps, instead of physical chips, would gamblers be willing to bet their money on riskier gambles?”