Mobile payment app users far more likely to overspend
PEOPLE who use mobile payment systems such as Apple Pay are a third more likely to overspend, a study has found.
The convenience of accessing funds without having to use cash or a card makes it easy to pay for goods.
However, this practicality may come at a cost, researchers from Seoul National University in South Korea said.
Analysis of the spending habits of more than 21,000 American adults found that users of mobile payments 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 with non-users.
Data show that about half the population have mobile payments enabled on their device, with hundreds of billions of pounds spent in 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” and people aged between 25 and 34 were most likely to use the method.
Those who use Apple Pay or similar forms of mobile payment were also 46 per cent more likely to pay off only the minimum amount on their credit card each month, 60 per cent more likely to receive a late fee for overdue credit card payments, and more than twice as likely to incur an “over-the-limit fee”.
“Our findings provide consistent evidence that mobile payment users are more likely to exhibit overspending behaviour,” the researchers write in their paper, published in the journal Computers in Human Behaviour.
They call for “researchers, community educators, and policymakers” to “put more efforts into educating financially illiterate individuals about a smarter way to use mobile payment”.