When is Money Real? When It Hurts to Spent It

The Dutch National Bank (DNB) has issued a working paper considering the implications of moving to non-cash payment methods, if any ¹.

The concept of the ‘pain of paying’, the negative emotions people experience while paying for goods and services, is well known. Electronic payments appear to inflict less pain than paying with cash, and the DNB’s concern is that over-spending is more likely as the Dutch public move swiftly away from cash.

As a result, it has carried out a large-scale detailed consumer survey to understand what is happening.

Key findings

Electronic payments hurt less than cash payments whether off- or on-line, especially for contactless payments and the

Netherland’s iDEAL payment method that is largely used for online payments. It also appears that older people feel less pain paying than teenagers.