Several factors contribute to increased spending when using digital payments, including the ease and convenience of cashless transactions. The absence of physical cash exchange can reduce the psychological impact of spending, making it feel less tangible. Quick payment options, such as tap-and-go cards and mobile wallets can also encourage impulsive buying behaviour.
Promotional offers like discounts, cashback, and reward points often entice users to make unplanned purchases. The widespread availability of online shopping platforms further amplifies this effect, as customers are exposed to targeted advertisements and personalized recommendations. Subscription services with auto-renewal features are another contributor, often leading to unnoticed recurring expenses. A lack of real-time awareness about account balances during transactions can also lead to overspending. Understanding these factors is essential for developing strategies to manage finances effectively in a cashless economy.
