Digital Payments Drive Increased Spending, Australian Study Finds

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Australian Research Shows That Digital Payments Encourage Higher Spending

June 29, 2024 The transition towards a cashless society is significantly altering spending behaviors, a comprehensive study from the University of Adelaide and the University of Melbourne reveals. The research concludes that digital payments are driving consumers to spend more, particularly on non-essential luxury items.

The study, a meta-analysis of 71 previous papers combined with observations of spending habits across 17 countries, found that the ease and convenience of cashless transactions make people more prone to overspending.

Key Findings:

  • Increased Spending with Cashless Payments: Researchers found that individuals tend to spend more when using digital payment methods compared to cash. This trend is especially pronounced for luxury goods, highlighting a shift towards greater expenditure on conspicuous consumption items such as high-end clothing and jewelry.
  • Cash as a Self-Control Method: Lachlan Schomburgk, a marketing researcher from the University of Adelaide, recommends using cash instead of cards to prevent overspending. “When using cash, people physically count and hand over notes and coins, making the act of spending more salient. If nothing is physically handed over, it’s easy to lose track of how much is spent,” he explained.
  • Impact on Tips and Donations: Contrary to expectations, the study found that digital payments do not lead to higher tips or donations. Consumers’ contributions to donations remain consistent regardless of whether they use cash or cashless methods.
  • Economic Conditions and the Cashless Effect: The research also uncovered a correlation between positive economic conditions and a stronger cashless effect. However, as digital payment methods become more widespread, their impact on consumer spending has weakened over time.


The study sheds light on an often-overlooked aspect of the cashless transition: its influence on spending behavior. “The transition towards a cashless society seems almost inevitable. I believe this research is crucial because it shines a light on how payment methods influence our spending behavior,” Schomburgk stated. “This understanding can help empower us to make more informed purchasing decisions.”

As digital payments continue to rise, consumers are encouraged to remain mindful of their spending habits and consider using cash to maintain better control over their expenses.

For more details on the study and its findings, visit Science Alert or contact the University of Adelaide’s marketing research department.

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Ahmed Mainul

My name is Ahmed Mainul Mondal, I'm the founder of the hospitality career profile website. I'm writing blogs and news posts as per user preferences.

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