Why Apple Pay could make you spend more than you are meant to


People who use Apple Pay and other mobile payment systems are a third more likely to overspend, a study has found. 

The ease and convenience of accessing one’s funds without the need to use cash or a card makes it disconcertingly easy to whip out a device and pay for goods. 

But the convenience may come at a literal cost, according to researchers from Seoul National University in South Korea. 

Analysis of the spending habits of more than 21,000 American adults found that mobile payment users had 34 per cent higher odds of spending more than their yearly income.

They were also 31 per cent more likely to have problems paying bills and expenses, compared to non-users.

Consumers move to ‘cashless society’

Data show that around half of people now have some form of mobile payment enabled on their device, with hundreds of billions of pounds spent this way every year. 

A third of the participants said they “used mobile payments to pay for products or services in person at a physical store”. People between 25 and 34 were the most likely to use the method of payment. 

Those who use Apple Pay or other similar forms of mobile payment were also 46 per cent more likely to only pay off the minimum amount per month on their credit card, 60 per cent more likely to get a late fee for overdue credit card payments and more than twice as likely to be stung with “an over-the-limit fee”.

“With the advancement of digital technologies, current consumers are transitioning to a cashless society where various types of digital payment methods are replacing conventional transaction methods (e.g, cash or checking accounts),” the researchers wrote in their paper, published in the journal Computers in Human Behaviour.

“As a more convenient and safer way to conduct transactions, mobile payment use has become the preferred payment method for many consumers.

“The likelihood of spending more than income, having difficulties covering expenses or paying bills on, paying a minimum payment, a late fee over the limit fee in using credit cards were significantly higher for mobile payment users. 

“In examining the moderating effect, we found that higher financial knowledge decreased the impacts…

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