Why can paying with cash feel more painful?<\/h2>\n
Cash makes spending a tangible experience. You have to count the banknotes, hand them over and sometimes wait for change. These physical actions make the money leaving your possession more noticeable. With cards and other payment methods, however, the transaction is completed through a quick action, and the amount is recorded digitally. You don’t physically see the money disappear. This difference helps explain why paying with cash can create a stronger sense of loss.<\/p>\n
However, there’s an important detail: not everyone experiences this effect to the same degree. Our habits, personal experiences and familiarity with different payment methods also play a role.<\/p>\n
A scientific study published in 2026 provides new evidence of this phenomenon.<\/p>\n
The science behind it: a study involving more than 32,000 participants<\/h2>\n
In August 2026, the Journal of Consumer Research<\/em> published a study titled A Mega-Replication of the Effect of Cash Versus Card Payment on Pain of Paying: Magnitude, Behavioral Outcomes, and Moderators<\/em>.<\/p>\n The researchers wanted to determine whether one of the classic findings in consumer psychology still holds true in a world where cards and digital payments have become part of everyday life. To investigate, they conducted 13 preregistered replication studies<\/strong>, involving a total of 32,371 participants<\/strong>.<\/p>\n The research also covered purchasing scenarios involving:<\/p>\n The findings supported the existence of the pain of paying: overall, paying with cash triggered a stronger psychological sense of loss than paying by card. But the researchers uncovered something even more interesting.<\/p>\n The researchers distinguished between two things that might seem similar but aren’t quite the same. The first is how much money someone actually spends. The second is how much they’re willing to pay for a particular product. The study found that the payment method had a more consistent direct effect on the amount spent than on people’s stated willingness to pay.<\/p>\n In other words, how we pay can influence our spending behaviour without necessarily changing how much we believe a product is worth. The researchers also found that the pain of paying helped explain this relationship and highlighted another important factor: how frequently someone uses cash or cards.<\/p>\n What feels like a perfectly natural transaction to one person may create a greater sense of effort, loss or uncertainty for someone else. The research confirms an overall trend, but it doesn’t mean everyone spends more when using a card or that all electronic payment methods produce the same psychological effect.<\/p>\n The pain of paying is closely connected to another phenomenon that has fascinated researchers for decades: the cashless effect<\/em>. This refers to the tendency to spend more when using payment methods other than cash. But how strong is the scientific evidence?<\/p>\n In September 2024, the Journal of Retailing<\/em> published a meta-analysis titled Less cash, more splash? A meta-analysis on the cashless effect<\/em>.<\/p>\n The researchers brought together findings from 71 scientific studies<\/strong>, providing 392 effect-size estimates related to payment methods and spending behaviour. Their conclusion was clear, although more nuanced than the headline might suggest: they found a positive, statistically significant effect of cashless payments on spending, but the effect was small.<\/p>\n In other words, the tendency exists, but it isn’t particularly large, and it doesn’t appear in the same way across all situations.<\/p>\n One of the most interesting findings from the meta-analysis is that the cashless effect<\/em> doesn’t depend solely on the payment method. What we’re buying and the circumstances surrounding the purchase also matter. For example, researchers found that the effect was stronger in situations involving conspicuous consumption, particularly purchases associated with image and social status. By contrast, it was less pronounced in socially motivated spending, such as certain charitable donations. The study also found that the effect tended to be stronger during periods of economic growth and that its intensity had decreased over time. That last finding is particularly interesting. As electronic payments become increasingly common, our relationship with them continues to evolve. The experience of paying isn’t static. It changes with technology, but it also changes with us.<\/strong><\/p>\n This shift is even reflected in how younger generations learn to interact with money. Take the classic board game Monopoly, for example. Who doesn’t remember counting colourful banknotes to buy a property or collect rent? Well, even Monopoly has evolved. Hasbro now offers editions where physical banknotes are replaced by bank cards and an electronic banking unit that works much like a small payment terminal. There’s even a version that uses a mobile app as the bank. What previous generations experienced through physical play money can now also be experienced through digital transactions. It’s a small but telling example of how the way we represent and understand money has changed.<\/p>\n And that raises an interesting question: as digital payments become increasingly familiar, is cash gradually disappearing from our lives? The data tells a much more interesting story.<\/p>\n The European Central Bank has been studying how consumers across the euro area shop and pay for years.<\/p>\n Its report, Study on the payment attitudes of consumers in the euro area (SPACE) 2024<\/em>, reveals a clear long-term trend.<\/p>\n In 2019, 72% of in-store transactions in the euro area were made in cash. By 2024, that figure had fallen to 52% of transactions<\/strong>. Even so, we still want alternatives, even when we don’t regularly use them. In 2024, 55% of euro area consumers said they preferred cards or other cashless payment methods when shopping in physical stores. However, 62% considered it important or very important to retain the option of paying in cash<\/strong>.<\/p>\n Preferring one payment method doesn’t mean wanting to give up the others. Someone might regularly use a card while still valuing the option to pay in cash. Or they might pay with their phone for convenience but switch methods when they want greater control or when a particular option isn’t available. This diversity of preferences offers an important lesson for businesses: the payment experience shouldn’t be built around the assumption that every customer wants exactly the same thing.<\/p>\n The same European Central Bank study reveals another finding closely linked to the pain of paying. When consumers were asked about the advantages of cash compared with cards:<\/p>\n Participants could select up to three responses.<\/p>\n The 35% figure is particularly interesting because it connects consumer preferences with one of the mechanisms studied in payment psychology: awareness of spending. When we pay with cash, the amount of money we have available is physically visible. We can see how much we had before the purchase and how much remains afterwards. This doesn’t prove that cash automatically helps everyone manage their finances better, but it does show that a significant proportion of consumers perceive it as an advantage.<\/p>\n The very thing that makes paying psychologically uncomfortable may also help us become more aware of how much we’re spending.<\/strong> And that’s one of the great paradoxes of money.<\/p>\n A study published in May 2024 in the Journal of Economic Behavior & Organization<\/em>, titled Paying in a blink of an eye: it hurts less, but you spend more<\/em>, explored precisely this question.<\/p>\n Using survey data from Dutch consumers, the researchers found that electronic payments were associated, on average, with less pain of paying than cash. The difference was particularly noticeable in perceptions of contactless payments and iDEAL, a widely used online payment method in the Netherlands.<\/p>\n Participants also perceived cash as the payment method that helped them avoid overspending the most, while contactless payments ranked at the opposite end. These findings are based on self-reported perceptions and shouldn’t be interpreted as proof that everyone who pays contactless spends more. However, they reinforce an important idea: the less visible the act of paying becomes, the more important it may be to maintain ways of staying aware of our spending.<\/strong><\/p>\n So far, we’ve explored what happens when we hand over cash, what changes when we use electronic payment methods and why our perception of spending can vary. But what does all this mean for a business selling products or services?<\/p>\n More than you might think. The moment of payment isn’t just a technical transaction. It’s also the point at which consumers confirm a financial decision, which means that designing a good payment experience requires understanding more than simply which payment methods are available.<\/p>\n Businesses can make payments easier without making the amount customers are spending less visible.<\/p>\n Clearly displaying the final price, any additional charges and the purchase conditions helps customers understand their decision before authorising the transaction. This transparency is particularly important in a world where many payments can be completed in just a few seconds.<\/p>\n A well-designed payment process shouldn’t stop customers from thinking about the money they’re spending. It should simply allow them to pay without unnecessary obstacles.<\/strong><\/p>\n The 2026 research on the pain of paying showed that our habits influence how strongly we experience this effect. We therefore can’t assume that everyone perceives an electronic transaction in the same way. This presents a challenge for businesses: understanding their customers and avoiding payment processes that depend on a single type of interaction.<\/p>\n Offering payment alternatives that are appropriate for each business can help accommodate different preferences and habits. The goal isn’t to add as many options as possible, but to allow customers to use payment methods they know and understand.<\/p>\n Payment psychology reminds us that our perception of spending can change depending on how a transaction is presented. That’s why the visual design and information provided throughout the payment process deserve attention.<\/p>\n Clearly displaying the final amount, subscription terms or a breakdown of charges can help customers understand exactly what they’re authorising. This doesn’t guarantee higher conversion rates, but it can support more transparent payment experiences and help businesses evaluate their processes based on real customer needs.<\/p>\n Payment technologies will continue to evolve. But as transactions become less tangible, there’s an important question we should keep asking:<\/p>\n How can we make paying easier without losing awareness of how much we’re spending?<\/strong><\/p>\n Research doesn’t provide a universal solution for every business. What it does show is that payment methods can influence our psychological experience, and that this relationship deserves attention when designing new payment processes.<\/p>\n\n
How much you spend isn’t necessarily the same as how much you’re willing to pay<\/h3>\n
Our relationship with money isn’t universal. It’s also shaped by our habits.<\/h3>\n
The cashless effect: do we spend more when we stop handling physical money?<\/h2>\n
Context also changes how we spend<\/h3>\n
![\"Monopoly](\"https:\/\/m.media-amazon.com\/images\/I\/71DV8gXpReL._AC_SL1200_.jpg\")
<\/p>\nThe European paradox: we’re using less cash, but we’re not ready to give it up<\/h2>\n
35% of euro area consumers believe cash helps them keep track of their spending<\/h3>\n
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What happens when we pay contactless?<\/h3>\n
What can businesses learn from the pain of paying?<\/h2>\n
1. Reducing friction doesn’t mean hiding the cost<\/h3>\n
2. Not all consumers experience spending in the same way<\/h3>\n
3. Information is part of the payment experience, too<\/h3>\n
4. The future of payments must balance innovation with spending awareness<\/h3>\n
Wannme: payment technology that puts people first<\/h2>\n