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Adoption of mobile payment shifts consumer spending patterns, habits
Paying for a cup of coffee with a smartphone instead of a credit card is gaining prominence among consumers – and is disrupting their spending patterns and consumption habits, according to new research co-written by a University of Illinois expert who studies operations management.
[...] Using a unique data set from one of the largest banks in China – which contained the transaction data from personal computer, offline and mobile payment channels – Xu and co-authors found that, on average, the total transaction amount increased by 2.4 percent after the adoption of the mobile payment channel, and that the total transaction frequency increased by more than 23 percent.
[...] “Switching to the mobile channel leads to more shopping overall, and it particularly affects more hedonistic shopping such as food, entertainment and travel,” Xu said. “But it doesn’t affect purchases like education or health care. So it’s changing consumer behavior.”
The greatest impact came on less costly items that are purchased frequently, such as beverages and movie tickets.
(Score: 2) by MostCynical on Sunday December 02 2018, @12:11PM (8 children)
Food: Coffee, takeaway food, vending machine crap.. Believable.
Entertainment: movies? Magazines? Reasonable.
Travel? Okay, if they are talking about buses, trains, and *maybe* taxis, or bike-hire, but does anyone buy a plane ticket with a mobile?
"I guess once you start doubting, there's no end to it." -Batou, Ghost in the Shell: Stand Alone Complex
(Score: 0) by Anonymous Coward on Sunday December 02 2018, @12:21PM
I do? But I'm not travelling more because I can buy a plane ticket on a phone. I think they mostly refer to things like Grab, or bike rentals, not planes.
I can buy train/transit ticket here (not china) via mobile too, but I rarely use anything except (personal) bike anyway ;)
(Score: 5, Insightful) by Anonymous Coward on Sunday December 02 2018, @12:38PM (6 children)
No, and I won't pay for coffee with it either.
Two reasons.
First is that they really want to break the $5 limit here for a cup of coffee which is IMOHO already excessive. They tried. They went to $5.50 and the backlash was extraordinary. Paying with cash imposes a mental limit. Paying by mobile means they can charge whatever they like without instance buyers remorse.
Second is that my mobile phone is the least secure of the devices I own. I don't have root on it. I can't afford to brick it. There will be no banking apps installed on it. I don't trust it.
(Score: 1, Informative) by Anonymous Coward on Sunday December 02 2018, @01:55PM (5 children)
How about make your own coffee? For $5, you can buy half a kilo of coffee. That tends to last a while.
(Score: 4, Insightful) by Runaway1956 on Sunday December 02 2018, @02:07PM (1 child)
Half a kilo - alright. In US measure, about $7 gets a can, 1 lb 14 oz of Folger's medium roast, which works fine for me. YMMV depending on your favorite brand, roast, grind, etc. Custom roast/grind stuff can get hella expensive. Cheap generic stuff is considerably less expensive. I'll happily pay a buck and a half for a bottomless cup of coffee at a truck stop or diner, two bucks isn't unreasonable. That five dollar a cup stuff? Utter nonsense. Starbucks is a fad that has outlived it's faddishness.
(Score: 0) by Anonymous Coward on Sunday December 02 2018, @06:04PM
Totally worth it and still way cheaper than this $5 per cup nonsense.
(Score: 2) by RandomFactor on Sunday December 02 2018, @03:54PM (2 children)
Or in my case, just drink the free stuff they have at work in the break room :-p
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Admittedly the Starbucks downstairs tastes significantly better, but $0 cost 'OK' vs. 5$ cost 'Tasty' is a heck of a value proposition for something that is functionally indistinguishable and takes an extra 30 minutes to stand in line and wait for.
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I'll go to Starbucks as a kind of social event, but on my own basically never.
В «Правде» нет известий, в «Известиях» нет правды
(Score: 2) by black6host on Sunday December 02 2018, @04:54PM (1 child)
The Starbucks coffee tastes better? You poor soul! Must be some pretty damn bad coffee in the break room :)
(Score: 2) by RandomFactor on Sunday December 02 2018, @05:01PM
It's not bad, but it is a bit harsher. I'm no coffee connoisseur.
Also there's a mental model where if you don't pay for it, it doesn't taste as good, and I'm not sure how much that plays into it.
В «Правде» нет известий, в «Известиях» нет правды
(Score: 5, Interesting) by Runaway1956 on Sunday December 02 2018, @02:14PM (8 children)
If more people thought like I do, credit/debit/device payment methods certainly wouldn't be what they are today. I like the feel of anonymous currency nestled into my wallet. No one gets to track my purchases. No one makes a note if I do something unusual, because I'm paying cash.
I've been forced into accepting electronic direct deposit to my checking account. Each Friday morning, I drive by my local ATM, and withdraw what I intend to give the wife for household expenses, plus my weekly gas money, lunch money, and just pocket change, plus any purchases that I intend to make. Usually, that is the only withdrawal that I make for the week. If something unexpected comes up, I will probably go by the ATM and withdraw a little more money.
My online purchases are tracked, of course. There's not much I can do about that. But, I'm not giving the bastards ALL of my information for free.
(Score: 5, Interesting) by The Mighty Buzzard on Sunday December 02 2018, @04:17PM (2 children)
Right there with you except if I need to use a card for something online I go and buy a prepaid one with folding money. If they want to keep track of my spending habits, I'm at least going to make tracking by card number pointless.
My rights don't end where your fear begins.
(Score: 1, Interesting) by Anonymous Coward on Sunday December 02 2018, @09:30PM (1 child)
Face recognition will still tie cash purchases to your permanent record - just two years away from being consistently true - that said, I still like cash to avoid the ~3% seller's charge paid to the credit card companies that I would indirectly pay
(Score: 0) by Anonymous Coward on Monday December 03 2018, @12:45AM
Facial recognition is a threat, but that is still no reason to hand over everything on a silver platter. Defeatism is self-defeating, and so it's good that you still use cash.
This is why mass surveillance in all its forms (whether done by the government or corporations) needs to be banned. It is simply too dangerous to allow. If corporations conduct mass surveillance, the government will be able to get the data, so the people who argue that corporations are private and thus should be able to do as they please have no leg to stand on.
(Score: 3, Interesting) by RandomFactor on Sunday December 02 2018, @05:03PM (4 children)
.
Sadly, I think you underestimate video surveillance and facial recognition.
В «Правде» нет известий, в «Известиях» нет правды
(Score: 1, Interesting) by Anonymous Coward on Sunday December 02 2018, @06:07PM (1 child)
May also be possible to track the serial numbers of bills from ATMs to self-pay machines. Even with human cashiers, the bank could still get data from the serial numbers when the store's night deposit is processed in the morning.
(Score: 0) by Anonymous Coward on Monday December 03 2018, @12:50AM
I've never seen anything more than hearsay that such a program exists. To begin with, given how often cash exchanges hands, the tracking would be entirely unreliable.
(Score: 3, Insightful) by Runaway1956 on Sunday December 02 2018, @06:15PM (1 child)
Perhaps. I won't argue very hard, but I'll offer you some argument. The places I frequent don't seem to be networked into the WWW yet. Most businesses have dumb cameras, that record XX number of hours, then begin erasing drive space to make room for new video. Cutting edge tech, and networking, cost. The bandwidth to truly network all of those video cameras isn't available out here in Outback, Nowhere.
In the cities? Hmmmm. . . maybe. The bandwidth is available, of course. The tech is available. But, still, both cost money. I suppose that even in the cities, you have a patchwork of superb surveillance, moderate surveillance, and shoddy surveillance that equals what we have out in the country side. Those who have the money, have the best, those who don't have the money, settle for whatever they can get.
Of course, I may just be fooling myself. The cops have plenty of bandwidth for license plate readers. Those computers on the passenger seats always seem to work quite well, no matter how far out in the country you get. Something to think about: The bandwidth has been there for years, with that almost-mythical "deepstate" always directing the telcos where that bandwidth needs to go. Just because I have no access to it, doesn't mean it doesn't exist at all. Food for thought, nothing more.
(Score: 2) by RandomFactor on Sunday December 02 2018, @06:52PM
Not really much to argue about there.
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I do live in the big city, which colors my perspective accordingly. But yes, it is probably worse than what you see.
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Still, I do fully intend to join you in BFE when I retire :-)
В «Правде» нет известий, в «Известиях» нет правды
(Score: 2) by SomeGuy on Sunday December 02 2018, @03:07PM (7 children)
What is the point of "paying with a cell phone" rather than a credit card, other than selling cell phones and letting some additional companies track you?
(Score: 5, Interesting) by Immerman on Sunday December 02 2018, @04:36PM (6 children)
Increasing customer spending?
Studies have shown that the further you get psychologically from a wealth transfer, the more impulsive you will be. A direct exchange of goods or services? You'll make sure you get a fair deal. Use cash as an intermediary? You'll be willing to sell for a bit less, and buy for a bit more. More so with paper money than coins. Credit cards push up the amount you'll be willing to overspend a bit more. And it seems phones dial it up a notch further - not surprisingly since a card is still psychologically just a payment device, while a phone enjoys a much broader and deeper psychological connection.
And every step taken to weaken the psychological connection to wealth transfer is another slice of the economic pie that capitalists can put in their own pocket.
(Score: 0) by Anonymous Coward on Sunday December 02 2018, @06:13PM (3 children)
Sound plausible, but are there studies to back this up?
(Score: 2) by Runaway1956 on Sunday December 02 2018, @06:25PM (1 child)
Perhaps not. But, think a little bit about yourself, and human psychology, and the process of setting up a phone to make payments for you. You put some amount of work into setting the thing up. When you think you've got it, you have to go test it. Ooops, didn't work, you got some part of the magic incantations wrong, or something. So, you go over the formulas, chant it all again, sign in blood again, and you go test it again. EUREKA!! IT WORKS!! You've invest blood, sweat, and tears, and part of your soul into linking your telephone directly into your bank account. You're going to USE IT now, aren't you?
I strongly suspect that if the studies are done, then GP's claim will be validated. For the reasons I offer, as well as the reasons he offers.
(Score: 2) by https on Sunday December 02 2018, @07:21PM
I do not use sendmail any more, so there must be a flaw in the reasoning.
Offended and laughing about it.
(Score: 0) by Anonymous Coward on Monday December 03 2018, @03:32AM
No need for a study, just look at how hard the banks are pushing it.
(Score: 2) by SomeGuy on Sunday December 02 2018, @07:00PM (1 child)
Well, that makes sense. Just look around and watch as every woman out there swipes away at her favorite online shopping site. Cell phones are just a purchasing platform.
But like tracking, there is no benefit to the actual user/customer, just the businesses.
(Score: 2) by Magic Oddball on Monday December 03 2018, @02:38AM
It's only "every woman" if you exclude the many who don't have smartphones (like my paternal aunt), typically use their computer for purchases after doing research & price-comparisons on it (like me), prefer to use their a tablet at home, or generally just don't spend any more time "shopping" than they have to (also like me). Therefore your generalization is invalid, as mass generalizations of half the population typically are.
(Score: 2, Troll) by legont on Sunday December 02 2018, @08:35PM (1 child)
The same pattern of spending makes people fat. (snacks and sodas instead of a dinner). How about 100% border tax on China made electronics to protect American health? Progressive liberals are already for taxes on sodas. Why not go after the root of the problem and help our balance sheet at the same time.
"Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
(Score: 2, Touché) by c0lo on Sunday December 02 2018, @11:07PM
Care to explain what's the relationship between electronics (Chinese or not) and American health?
What makes Americans so exceptionally susceptible to illness due to electronics?
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 1, Insightful) by Anonymous Coward on Monday December 03 2018, @11:10AM
Assuming you've got a smartphone.
Or a credit card.
Or can afford to buy coffee.
(Score: 0) by Anonymous Coward on Monday December 03 2018, @05:58PM
Did they correct for the rapidly improving economic status of China during the time covered by the data set? It seems like another obvious correlation that needs to be considered.