Payment method and perceptions of ownership

Abstract

How consumers pay influences how they feel about a transaction. In particular, paying by card has been argued to have an effect on the perception of cost; making it less salient and painful. We propose and show that payment method also influences how consumers feel about the acquired good. Specifically we focus on effects of the payment method on psychological ownership, i.e. the perception of an object as "mine". We propose that cash payment results in stronger psychological ownership because it influences the extent of perceived investment in an object. We provide evidence for the proposed effect from field and laboratory settings. Results of a longitudinal exit-survey and an experiment show that cash payers report higher levels of immediate psychological ownership than card payers. However, this effect seems to depend on the meanings associated with a payment method. Asian students (who associate credit card payment with investment and debt) do not exhibit this effect. Moreover the initial boost in psychological ownership seems to be comparably shortlived. Whilst those paying in cash experience no further increase in psychological ownership over time, those paying by card do.

The two faces of ownership: Introduction to the special section on ownership and economic decisions

“…While generally open to intervention (e.g., changes in work context can facilitate psychological ownership for one's job; Brown, Pierce, & Crossley, 2014), this dimension of ownership can be less directly influenced. Moreover, because it is not a factual state, this face of ownership may be equally useful as a predictor (e.g., Kamleitner, 2011;Kamleitner & Feuchtl, forthcoming;O'Driscoll, Pierce, & Coghlan, 2006;Peck & Shu, 2009) as well as an outcome of economic behaviors (e.g., Brown et al, 2014;Kamleitner & Erki, 2013).…”

Prices for cash and cash for prices? Theory and evidence on convenient pricing

“…On the contrary, a credit or debit card payment is costly because of the terminal cost and transaction fee paid to the network (Verdier, 2011). The seller thus perceives a cash payment as less costly than a card payment (Chatterjee and Rose, 2012;Kamleitner and Erki, 2013). Although preferring a cash payment (Kim and Lee, 2012), the seller cannot force the buyer to pay cash.…”

The moderating role of national cultural values in smoking cessation

“…Research mostly treats the concept of psychological ownership as a uni-dimensional construct (e.g., Kamleitner & Erki, 2013;Shu & Peck, 2011). However, support for a multi-dimensional view comes from Pierce et al (2003) in their discussions on facets of psychological ownership.…”