THE INFLUENCE OF DIGITAL PAYMENT SYSTEMS ON SPENDING BEHAVIOR

Digital payment systems, including bank cards, mobile wallets and contactless payments, are rapidly replacing cash in everyday transactions. This article analyses from a behavioral economics perspective how the form of payment influences the way people perceive, plan and control their spending. Based on a critical review of experimental and empirical studies, the paper discusses the pain of paying, mental accounting, payment coupling, transparency of spending and the effects of frictionless payment technologies. The findings of the reviewed literature suggest that less salient and more convenient forms of payment tend to reduce the psychological cost of spending and to increase willingness to pay, although the effects depend on the context, the individual and the design of the payment tool. The article proposes practical recommendations for consumers, young people, financial service providers and regulators to support conscious and responsible spending in the era of digital payments.