The introduction of new payment methods has resulted in one of the most significant changes in the way we consume goods and services. In this paper, I present results of a field and a laboratory experiment designed to determine the effect of payment method (cash vs. mobile payment) on spending, and a meta-analysis of previous literature about payment method effect. In the field experiment, I collected cashier receipts from Chinese supermarkets. Compared to cash payment, mobile payments significantly increased the amount purchased and the average amount spent on each item. This effect was found to be particularly large for high price elasticity goods. In the laboratory experiment, participants were randomly assigned to one of four groups that varied with respect to the kind of payment and the kind of incentives, eliminating the potential endogeneity problem from the field experiment. I found that compared to cash, mobile payments lead to a significantly higher willingness to pay (WTP) for consumption. In contrast to others, I found that “pain of paying” does not moderate the payment method effect; however, other psychological factors were found to work as potential mechanisms for affecting WTP. This paper has the following innovations: First, previous experimental studies on payment methods focused on credit cards or debit cards, which are not the primary payment methods in China. This paper uses both the lab experiment and the field experiment to confirm that the payment representation form would influence consumption. Second, the previous experiments failed to test the influence of monetary forms of the incentives due to the cash in-pocket constraint. This study uses the two-by-two groups design to avoid the problem and found the different incentives form led to a strong earmarking effect. That is, the WTP would be significantly higher if the incentives were in the same payment form as paying. Third, this paper discusses the psychological factors that may mediate the payment method effect, including the pain of paying, the BIS/BAS system, and the attitude toward mobile payment. The mechanism discussion poses important implications for both consumers, merchants, and policymakers.
","abstract_html":"<p>The introduction of new payment methods has resulted in one of the most significant changes in the way we consume goods and services. In this paper, I present results of a field and a laboratory experiment designed to determine the effect of payment method (cash vs. mobile payment) on spending, and a meta-analysis of previous literature about payment method effect. In the field experiment, I collected cashier receipts from Chinese supermarkets. Compared to cash payment, mobile payments significantly increased the amount purchased and the average amount spent on each item. This effect was found to be particularly large for high price elasticity goods. In the laboratory experiment, participants were randomly assigned to one of four groups that varied with respect to the kind of payment and the kind of incentives, eliminating the potential endogeneity problem from the field experiment. I found that compared to cash, mobile payments lead to a significantly higher willingness to pay (WTP) for consumption. In contrast to others, I found that “pain of paying” does not moderate the payment method effect; however, other psychological factors were found to work as potential mechanisms for affecting WTP. This paper has the following innovations: First, previous experimental studies on payment methods focused on credit cards or debit cards, which are not the primary payment methods in China. This paper uses both the lab experiment and the field experiment to confirm that the payment representation form would influence consumption. Second, the previous experiments failed to test the influence of monetary forms of the incentives due to the cash in-pocket constraint. This study uses the two-by-two groups design to avoid the problem and found the different incentives form led to a strong earmarking effect. That is, the WTP would be significantly higher if the incentives were in the same payment form as paying. Third, this paper discusses the psychological factors that may mediate the payment method effect, including the pain of paying, the BIS/BAS system, and the attitude toward mobile payment. The mechanism discussion poses important implications for both consumers, merchants, and policymakers.</p>","abstract_has_math":false,"creators":["Jiang, Yizhao"],"institution":null,"degree_name":"Economics, PhD","degree_level":"Restricted to Claremont Colleges Dissertation","degree_discipline":"School of Social Science, Politics, and Evaluation","degree_department":null,"school":null,"contributors":["Tom Kniesner","Joshua Tasoff"],"advisors":[],"committee_chairs":[],"committee_members":[],"year":2022,"date_issued":"2022-01-01T08:00:00Z","date_published":"2022-01-01T08:00:00Z","updated_at":"2026-07-24T01:40:15Z","subjects":["experiment","mobile payment","pain of paying","payment methods","willingness to pay","Economics"],"languages":[],"rights":[],"rights_urls":[],"identifier_entries":[]},"links":{"outbound_url":"https://scholarship.claremont.edu/cgu_etd/492","outbound_label":"Repository record","outbound_source":"dc:identifier"},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:contributor","label":"Contributor","values":["Tom Kniesner","Joshua Tasoff"]},{"key":"dc:creator","label":"Author","values":["Jiang, Yizhao"]}]},{"id":"academic_context","label":"Academic Context","entries":[{"key":"dc:date.available","label":"Dc Date Available","values":["2023-04-19T07:00:00Z"]},{"key":"thesis:degree_discipline","label":"Discipline","values":["School of Social Science, Politics, and Evaluation"]},{"key":"thesis:degree_level","label":"Degree Level","values":["Restricted to Claremont Colleges Dissertation"]},{"key":"thesis:degree_name","label":"Degree Name","values":["Economics, PhD"]}]},{"id":"subjects_keywords","label":"Subjects and Keywords","entries":[{"key":"dc:subject","label":"Dc Subject","values":["experiment","mobile payment","pain of paying","payment methods","willingness to pay","Economics"]}]},{"id":"identifiers","label":"Identifiers","entries":[{"key":"dc:identifier","label":"Identifier","values":["https://scholarship.claremont.edu/cgu_etd/492"]}]},{"id":"additional","label":"Additional Metadata","entries":[{"key":"dc:description.abstract","label":"Abstract","values":["The introduction of new payment methods has resulted in one of the most significant changes in the way we consume goods and services. In this paper, I present results of a field and a laboratory experiment designed to determine the effect of payment method (cash vs. mobile payment) on spending, and a meta-analysis of previous literature about payment method effect. In the field experiment, I collected cashier receipts from Chinese supermarkets. Compared to cash payment, mobile payments significantly increased the amount purchased and the average amount spent on each item. This effect was found to be particularly large for high price elasticity goods. In the laboratory experiment, participants were randomly assigned to one of four groups that varied with respect to the kind of payment and the kind of incentives, eliminating the potential endogeneity problem from the field experiment. I found that compared to cash, mobile payments lead to a significantly higher willingness to pay (WTP) for consumption. In contrast to others, I found that “pain of paying” does not moderate the payment method effect; however, other psychological factors were found to work as potential mechanisms for affecting WTP. This paper has the following innovations: First, previous experimental studies on payment methods focused on credit cards or debit cards, which are not the primary payment methods in China. This paper uses both the lab experiment and the field experiment to confirm that the payment representation form would influence consumption. Second, the previous experiments failed to test the influence of monetary forms of the incentives due to the cash in-pocket constraint. This study uses the two-by-two groups design to avoid the problem and found the different incentives form led to a strong earmarking effect. That is, the WTP would be significantly higher if the incentives were in the same payment form as paying. Third, this paper discusses the psychological factors that may mediate the payment method effect, including the pain of paying, the BIS/BAS system, and the attitude toward mobile payment. The mechanism discussion poses important implications for both consumers, merchants, and policymakers.
"]},{"key":"dc:title","label":"Title","values":["The Influence of Payment Method: Do Consumers Pay More with Mobile Payment?"]}]}],"canonical_facts":{"dc:contributor":["Tom Kniesner","Joshua Tasoff"],"dc:creator":["Jiang, Yizhao"],"dc:date.available":["2023-04-19T07:00:00Z"],"dc:description.abstract":["The introduction of new payment methods has resulted in one of the most significant changes in the way we consume goods and services. In this paper, I present results of a field and a laboratory experiment designed to determine the effect of payment method (cash vs. mobile payment) on spending, and a meta-analysis of previous literature about payment method effect. In the field experiment, I collected cashier receipts from Chinese supermarkets. Compared to cash payment, mobile payments significantly increased the amount purchased and the average amount spent on each item. This effect was found to be particularly large for high price elasticity goods. In the laboratory experiment, participants were randomly assigned to one of four groups that varied with respect to the kind of payment and the kind of incentives, eliminating the potential endogeneity problem from the field experiment. I found that compared to cash, mobile payments lead to a significantly higher willingness to pay (WTP) for consumption. In contrast to others, I found that “pain of paying” does not moderate the payment method effect; however, other psychological factors were found to work as potential mechanisms for affecting WTP. This paper has the following innovations: First, previous experimental studies on payment methods focused on credit cards or debit cards, which are not the primary payment methods in China. This paper uses both the lab experiment and the field experiment to confirm that the payment representation form would influence consumption. Second, the previous experiments failed to test the influence of monetary forms of the incentives due to the cash in-pocket constraint. This study uses the two-by-two groups design to avoid the problem and found the different incentives form led to a strong earmarking effect. That is, the WTP would be significantly higher if the incentives were in the same payment form as paying. Third, this paper discusses the psychological factors that may mediate the payment method effect, including the pain of paying, the BIS/BAS system, and the attitude toward mobile payment. The mechanism discussion poses important implications for both consumers, merchants, and policymakers.
"],"dc:identifier":["https://scholarship.claremont.edu/cgu_etd/492"],"dc:subject":["experiment","mobile payment","pain of paying","payment methods","willingness to pay","Economics"],"dc:title":["The Influence of Payment Method: Do Consumers Pay More with Mobile Payment?"],"thesis:degree_discipline":["School of Social Science, Politics, and Evaluation"],"thesis:degree_level":["Restricted to Claremont Colleges Dissertation"],"thesis:degree_name":["Economics, PhD"]},"updated_at":"2026-07-24T01:40:15Z"}