Small-value transfer systems are the arteries that connect every economy. They support a wide variety of transactions, including payments between individuals and between businesses.
Whether it's cash or plastic, how you pay can influence the amount that you spend. And research suggests that some payment instruments encourage overspending. Credit cards and mobile wallets, for example, may make it easier to buy frivolous items.
Credit Cards
Credit cards allow consumers to borrow money to purchase goods and services. The cardholder agrees to pay the bank back, either in full or at least the minimum balance due by the end of each month, and the card issuer charges interest on any unpaid balance. Credit card companies also charge merchants a fee, called a swipe fee, to process the transaction.
When the cardholder makes a purchase, he or she must give the merchant a signed receipt that contains the card number and the cardholder's name. The cardholder can also give verbal authorization over the telephone or enter a personal identification number (PIN) into a card reader to authorize a transaction.
Card-based payments are relatively new in comparison to other payment methods, and research has only recently begun to explore how the different forms of cards influence spending behavior. One key finding is that people tend to spend more when they use credit cards, compared to other forms of payment. This phenomenon is known as the cashless effect and was first described in 1979 by Elizabeth Hirschman, a leading theorist in consumer and behavioral economics.정보이용료 현금화
Hirschman's original field study involved sending researchers to various branches of a major department store chain, and asking customers to complete a survey. She found that people using credit cards spent more than those who paid in cash, and that customers who used both store and credit cards tended to spend the most of all. This led to her hypothesis that paying with a credit card triggers more purchases than just purchasing something with cash, which may explain why so many of us have trouble controlling our spending.
Credit card usage data is collected by a variety of sources, including the card issuers themselves, banks that lend funds to the card issuers, and merchant processors that collect payments from the cardholders and send them to the card issuers. The card issuers then aggregate the data and provide it to their customers in reports, such as the CFPB's Credit Card Accountability, Responsibility, and Disclosure Act Report (CARD). This information is useful for understanding how consumers use their credit cards, but it can also be misleading because cardholders are not necessarily able to link their transactions to other financial variables.
Electronic Payments
As consumers continue to migrate away from cash and checks, e-payments have become the new king of small payments. By enabling your customers to purchase products and services through these digital payment methods, you can increase customer retention and improve your bottom line. But with so many options available, it can be challenging to find the right system for your business.
The most popular form of e-payments is the credit card, which allows consumers to make quick and secure purchases. Credit cards also provide a range of benefits, such as the ability to earn rewards and rebates. In addition, they are a safe and convenient method of payment for businesses, as customers can spread the cost of their purchases over time.
Another type of e-payment is the mobile payment, which enables consumers to make transactions with merchants through their smartphones. Mobile payments are becoming increasingly popular, and are expected to surpass traditional transactions in the near future. While the benefits of mobile payments are numerous, they can present some challenges as well. For example, mobile payment apps can be vulnerable to malware and may lack the security features of traditional bank accounts.
In order to avoid these risks, it is important to choose a mobile payment system that offers a high level of security. You should also ensure that your mobile payment app has a dedicated support team, so you can get help if any issues arise.
In addition, you should consider how easy it will be for your customers to use your mobile payment system. A simple and user-friendly interface will improve their experience, and will make them more likely to return to your store in the future. This study used the TAM and IDT approaches to analyze the factors that influence consumers’ acceptance of third-party electronic payment systems offered by e-commerce platforms under financial digital transformation. The empirical results of this study can serve as a reference for the financial industry and e-commerce platforms in driving innovation in electronic payments. In particular, this study found that users’ external environment and internal characteristics have a significant effect on their perceived usefulness and ease of use of third-party electronic payment systems.
Cash
Cash has long been the mainstay of many people’s day-to-day transactions. Its roots go back 40,000 years, when people bartered for goods and services ranging from seashells to flint tools. As the monetary system evolved, it took various forms, but ultimately became the physical money that we carry around in our pockets and wallets.
Despite the fact that its use has fallen dramatically over the past decade in favor of payment cards, especially debit, it remains dominant for low-value transactions and is often the fallback when other options are not available. It is also important for certain categories of consumers, notably lower-income individuals.
As you might expect, payment preferences vary by age and income. Individuals with household incomes below $25,000 tend to be heavy users of cash, while those with higher incomes are more likely to prefer non-cash methods.
The reason for these differences is probably related to cost. Consumers typically pay more when they use credit cards rather than cash. This is because retailers incur processing and other costs when consumers use card payments. For example, a typical card payment costs a retailer 24 euro cents while a cash payment may only cost them one euro (plus the merchant’s standard booking fee).
It is common to hear pundits declare that we are headed toward a world where consumers will no longer need to carry or use cash. However, this is probably not a realistic prediction. As the Diary of Consumer Payment Choice shows, consumers tend to use other payment instruments for high-value transactions, and most who prefer a non-cash instrument list cash as their backup option.
Some analysts have also pointed to the importance of cash in some cultural traditions, such as tipping and gift-giving. In addition, some consumers value the privacy that cash provides, particularly in countries with repressive regimes. Others simply want a diverse monetary system that includes centralised, state-issued currency. It is possible that as younger generations come of age, they will adopt new digital payment systems faster than their predecessors and push cash into the margins. However, a recent survey from Paysafe suggests that even this will not be a major change, and that most consumers will still choose to use cash on a regular basis.
Venmo
Venmo is one of the most popular fintech apps and has been a driving force behind the digital payments boom. Originally a P2P app that allowed users to transfer funds between their own accounts, Venmo now allows for payment at more than two million online merchants, everywhere PayPal is accepted. It also recently expanded its business offerings, allowing users to pay for goods and services at restaurants and online marketplaces like Uber Eats, Poshmark, and Hulu using their bank account or Venmo balance.
The app’s popularity with consumers has been driven by its ease of use and the relative lack of fees associated with the service, compared to traditional credit cards or online banking apps. The app is largely free to send money between friends, although there are fees associated with adding or withdrawing funds from your Venmo balance, as well as for transferring cash to or from your bank account. Credit card transactions have a 3% fee, which is standard for payment apps.
Unlike some other fintech apps, Venmo has not tried to compete directly with the major banks by partnering with them or by offering bank-associated features. However, it has found a niche among consumers who do not trust traditional financial institutions. The app’s appeal is especially strong among younger generations and people who live in urban areas.
In addition to its convenience, the ability to track and document purchases with Venmo is also attractive for many users. Nevertheless, some users report having difficulty with the tax implications of their Venmo activity. As a result, some users are considering alternative payment methods, particularly those who use the platform to sell items on platforms like Etsy or Fiverr.
A recent study by the University of Colorado tested whether participants would be willing to accept a payment in either cash or Venmo for a series of exchange tasks. Participants were randomized into which form of payment they were offered in each task, and the form of payment was presented to them repeatedly throughout each experiment. The results showed that a significant proportion of respondents were willing to give up an average of $0.39 to receive their exchange payment in Venmo.