Cashless payments and consumer spending
The Swiss National Bank (SNB) published a paper that examines how payment choice affects consumer discretionary spending using a proprietary dataset that links a payment-methods survey, a payment-diary survey and a behavioral survey for a representative sample of 1,138 Swiss consumers. It finds that “present-biased” consumers spend more, the more often they use cashless payment instruments. (Present-based consumers are those that score high on indicators of impulsivity and procrastination.) For consumers with low levels of present bias, spending is unaffected by payment instrument usage. This suggests that designers of instant payment services and central bank digital currency (CBDC) wallets consider offering prepaid payment cards or of mobile-payment applications that allow consumers to manage and restrict their liquidity in a convenient manner. [Read more at the SNB]
