Problem summary

We spend more when no cash is involved in a transaction


  • Use to increase sales
  • Use to combat overspending

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  • Less friction results in more sales. Make paying effortless. The less tangible a payment is, the more we tend to consume. Coins and notes, which we can see, feel, and smell, is the most transparent form of payment. Credit cards or prepaid accounts are not transparent.
  • Be ethical. Due to the Cashless Effect, customers will possibly end up spending more money than they actually have and in turn cause them to fall into debt. This puts more responsibility on you as a designer. Be ethical.
  • Combat overspending. If you want to help customers from overspending, consider creating a budget, imposing a credit limit, or increasing friction for big expenses.


The more effortless a sale is, the less conscious effort it requires and the more revenue it will generate. Simplicity pays off. We are more aware of the exchange of value that occurs, when we pay with cash as it is visible and tangible and similarly lose it when we pay by credit card. The Cashless Effect disregards purchase size and influences both a $1 sale and a $1000 sale.


The cashless effect was first studied by Elizabeth Hirschman, a marketing and economics researcher, in 1979. She was interested in HOW people spend money rather than WHY and found a difference in spending between those who paid with cash and those who paid with a credit card or store issued card.

1 The Cashless Effect, explained at Decision Lab

2 Cashless Effect at Coglode

3 Hirschman, E. C. (1979). Differences in Consumer Purchase Behavior by Credit Card Payment System. Journal of Consumer Research, 6(1), 58-66.

4 Feinberg, R. (n.d.). Credit Cards as Spending Facilitating Stimuli: A conditioning interpretation. Journal of Consumer Research, 13(1), 348-356.

5 Soman (2003) The Effect of Payment Transparency on Consumption: Quasi-Experiments from the Field. Marketing Letters

6 The Cashless Effect | Behavioural Science in Banking at Moneythor

7 The Cashless Effect at Learning Loop

User Interface Design Patterns