Why do you feel bad about spending cash, but not about making online payments?

[püsür]

Makes sense. When you hold your card on an NFC device, whether you're paying 1 EUR or 1000 EUR, the movement and the act are exactly the same. But when you pay 1 EUR and 1000 EUR in cash, there's massive psychological difference.

A theory that is not yet researched by MIT: When you pay in BTC it's both worse than cash and credit card! 

I think it is true for me. Paying in BTC feels like you directly take from your future profit, somehow. It surely feels worse for me. I know technically paying fiat or BTC are almost same, economically. But it definitely feels same, just psychological toll of it. For the original post, I don't think paying with cash or card feels different. I saw the MIT study but it is not the case for me. Well, honestly it has been ages since I paid something important with cash. Maybe like 10 years ago, even before maybe. These days I don't use cash at all, there is some cash in my wallet, same bills for months. Since corona, I think maybe once or twice have been not using card payment. So, I cannot feel the psychological aspect of difference between cash payment and card payment. But everyone knows it is your money and every logical person would feel the same I think.

[Dreadboost]

It depends on the person, I understand your point because cash expenses are physical or material reduction while online payments seems seemless but the reverse is for me, maybe my brain is faulty but I despise making payment online, overall I despise seeing my balance reduce. But with cash I often feel the line between balance and expenses is blurred so I spend cash more comfortable than online payments. Plus those little bank deductions from transfers are annoying.

I don't think there is anything wrong with your brain  . The issue isn't the cash or the online payment method for making purchases, but how visible the spending feels to you. People have completely different reasoning and reactions to the same means of making purchases. Bank online payments may even feel more painful because of the high charges taken from the account for each transaction you make. At the same time, most people prefer the ease of making payments online. Meanwhile, for cash payment, they have to bear the stress of visiting the bank to withdraw cash. At times make use of the POS to get cash. Charges also apply.

[AmaGold70]

I think this is based on an individual paspective, as for me, spending physical money, and digital money have the same impact because you will always know money have gone out of your hand or your bank account. Each time I make transfer through bank application, I see my account reducing in value, and this same thing also occur in spending physical cash . However what makes me uncomfortable while spending money be it physical or through transfer is when I spend unnecessarily, and besides this points. The online transfer of money has made spending money very easy for people, like in the case of sending money for someone who is far, you can do that in your own convenience, also reduces carrying large amount of money around, but as for the impact on the person spending money, i don't really find any difference.

[Mayor of ogba]

I don't know how others feel when they spend fiat (paper money) or make online payments with either crypto or card, but as for me I don't feel bad since I won't buy an item at a high cost with fiat and buy the same item at a low cost if I'm paying with my card. The only time I feel bad after spending fiat or paying with my card is when I don't have sufficient funds with me and it will take some weeks before I will have money, which means that if I'm in need of something I can't afford it unless I have to borrow from a friend to sort myself out.

[strunberg]

Makes sense. When you hold your card on an NFC device, whether you're paying 1 EUR or 1000 EUR, the movement and the act are exactly the same. But when you pay 1 EUR and 1000 EUR in cash, there's massive psychological difference.
A theory that is not yet researched by MIT: When you pay in BTC it's both worse than cash and credit card! 

Personally, I perceive a difference in the psychological impact of using cards or online payments versus cash and BTC. Honestly, when making online payments, I don't feel like I'm losing anything I actually possess. I can't quite explain it, but I think it’s because online payments are made via smartphone apps; psychologically, it feels like I’m simply moving numbers around within my bank balance. With cash—and I agree with you here—I am physically handing over something I own to another person, and it feels like a genuine loss of an asset.
It’s even worse with BTC  . When I’m in a bind and need cash, cashing out my BTC balance makes me feel like I’m squandering a future investment. Sometimes, when I see the price of BTC rising, I find myself recalculating exactly how much BTC I’ve already converted into cash.

[SUPERSAIAN]

I can't stop thinking about people counting money at the market. Since we considered that and concluded that the problem was friction. We engineered the friction out. Now all are broke and no one knows where the money went.

That counting was doing something though. Tactile, visual, working memory and loss aversion all go off at once and make you pause from letting go of resources. We made this nice multi-layered check in every single transactio. And we threw it away because swiping was faster. The only thing that keeps you from buying whatever the algorithm wants you to buy next is the pain of paying.

Does the fake money in games help train people to dissociate the consequence of spending you talk about? That's no longer restricted to games. All apps that have a streak counter, have a loyalty tier, or have a progress bar are using variable ratio reinforcement. This is exactly the same mechanism that creates addiction to slot machines. Except now it's your coffee app. Your grocery delivery. The system is more effective if you're not thinking.

It is truly fascinating that spending physical paper money causes people pain, whereas the digital figures we see at the touch of a button do not. This is certainly a subject that warrants further research. Yes, I am certain that people feel differently when they earn money and actually count it out. Just imagine if you are constantly making sales, you receive cash and physically touch the money.

[bakasabo]

It is truly fascinating that spending physical paper money causes people pain, whereas the digital figures we see at the touch of a button do not. This is certainly a subject that warrants further research. Yes, I am certain that people feel differently when they earn money and actually count it out. Just imagine if you are constantly making sales, you receive cash and physically touch the money.

Here is "my story" of spending cash and making digital payments. I do feel weird, maybe annoyed from time to time when I spend cash. Here is the thing, when I go out and have cash with me, it allows me to limit my expenses. It stops me to exceed my budget. Going out to have fun and have several cards with you seems risky, if you get what I mean (I think that is the reason why I still dont set and use Apple Pay). Other things that bothers me - laziness in some situations. I think it already a tradition to give money (cash) as a present for birthday. You put cash in envelope or in congratulation card - a very convenient gift. Laziness expresses when I dont have cash (banknotes in particular) to put in the envelop, I had to go to ATM

[Hewlet]

I don't know how others feel when they spend fiat (paper money) or make online payments with either crypto or card, but as for me I don't feel bad since I won't buy an item at a high cost with fiat and buy the same item at a low cost if I'm paying with my card. The only time I feel bad after spending fiat or paying with my card is when I don't have sufficient funds with me and it will take some weeks before I will have money, which means that if I'm in need of something I can't afford it unless I have to borrow from a friend to sort myself out.

Well, this might be peculiar to you and if you don't feel bad it might just be that you a financially disciplined person that spends only on the things that you need and not on regular things and that you are very good at budgeting. i have got to a super market to make few purchase and by the time i came out, i discovered that i have quite a lot.  i felt it but not as much as i would have felt if i made the payment through cash.

I think that the strength of some countries currency denomination is part of the reason for this because if you are making purchase with a less valuable note, you will be needing it in larger quantity and releasing $100 in cash for instance in some denomination that has it in 200 pices of an equivalent of $0.5 per note will certainly look like a lot compared to using mobile transfer that goes off asap.

[Mayor of ogba]

Well, this might be peculiar to you and if you don't feel bad it might just be that you a financially disciplined person that spends only on the things that you need and not on regular things and that you are very good at budgeting. i have got to a super market to make few purchase and by the time i came out, i discovered that i have quite a lot.  i felt it but not as much as i would have felt if i made the payment through cash.

I think that the strength of some countries currency denomination is part of the reason for this because if you are making purchase with a less valuable note, you will be needing it in larger quantity and releasing $100 in cash for instance in some denomination that has it in 200 pices of an equivalent of $0.5 per note will certainly look like a lot compared to using mobile transfer that goes off asap.

Yes I'm financially disciplined and I'm very good at budgeting because from the country I come from, as a man you are face with a lot of responsibilities and if you go broke no one is coming to bail you out you are 100% responsible to figure your way back to the top, so I always have this on my mindset and it has helped me never to spend recklessly. Last week I went to a supermarket to get myself and my family perfume, deodorant, toothpaste, air wick, dettol, and liquid soup for bathing. Because of inflation I spent more than the amount I budgeted but I didn't feel bad paying the amount I didn't budget for because what I went to buy is essential to keep my family up and running.

[Antotena]

I think it is true for me. Paying in BTC feels like you directly take from your future profit, somehow. It surely feels worse for me. I know technically paying fiat or BTC are almost same, economically. But it definitely feels same, just psychological toll of it. For the original post, I don't think paying with cash or card feels different. I saw the MIT study but it is not the case for me. Well, honestly it has been ages since I paid something important with cash. Maybe like 10 years ago, even before maybe. These days I don't use cash at all, there is some cash in my wallet, same bills for months. Since corona, I think maybe once or twice have been not using card payment. So, I cannot feel the psychological aspect of difference between cash payment and card payment. But everyone knows it is your money and every logical person would feel the same I think.

I don't think I have spent Bitcoin to feel bad. I have directly swap Bitcoin for an item before, it was a close friend that wanted to sell the item and instead of doing conversion to cash, he ask for a Bitcoin worth and I have him and I pick the item. It wouldn't make any difference if I made the payment with another currency of fiat because I don't have the money anywhere else thanbusing Bitcoin, as long as the worth is the same, there is no big difference.

We need to spend buy things regardless of how we want to make investment. It's even proper that we set aside investment on Bitcoin on a separate place where you don't have to touch when you want to spend. For instance, you can use your investment in a cold wallet and top your hardware wallet for other investments, this is how you make solid investment with commitment.

[savetheFORUM]

I have observed this a number of times. Back in times when digital payments were not a thing, I used to carry a decent amount of cash for day-to-day transactions. Still, at the end of the day I was able to save some from my daily budget but after I started using digital payments, I have observed that I would exceed the entire limit for the day and might sometimes add a few extra bucks to have a good time. I think we are miss the feeling here. If we are giving cash to someone, our brain functions in a way that we can save some or spend less. When it comes to digital payments, we would simply scan the QR and make the payment without giving it a second thought.

We need to incorporate discipline in order to change this habit. Yes, it is going to take some time but we do not have any other option because the future is digital and gradually, we would start forgetting about the actual paper money.

[LUCKMCFLY]

My very particular reason for not liking to spend cash is because where I live there are three or four different currencies, and it's very difficult to find a specific type of cash currency, plus it's more expensive to obtain it even when paying with dollars. But you have to buy it because it's the currency most commonly used for daily purchases. If digital payment options were available for everything, it would be much better because you wouldn't have to pay external fees where there's excessive speculation and increased inflation implemented by the very merchants who sell food, goods, services, and other things.

In this respect, if we pay digitally, we're giving people the opportunity to spend cash only on what's most important, like emergencies or similar situations. Sometimes people need cash simply because they want to hold foreign currency to operate and prevent their local currency from devaluing.