A citizen of Serbia swipes his card to pay an average of 102 times a year. Cash still dominates retail, but that could soon reverse. And cards have one big drawback - they take our money more easily
Cash or card? That question has become a rule in purchasing, shopping or a bar. And more and more people are responding - the card.
Most of the money has always been digital and goes from account to account, and only a small part is printed and minted. But what is new is that digital payments are taking over in retail.
The National Bank of Serbia has been encouraging this for years. Thus, the number of card transactions at point-of-sale terminals (the small ones to which we send the card) jumped from 246 million (2019) to 521 million last year. And counting only cards issued in Serbia, so not tourists.
This means that the adult residents of Serbia swipe their card 102 times a year on average to pay.
Advantages and disadvantages
It's easier to carry a card than money, it's faster to pay, there's no mistake in the amount or change, and the banks are happy - for them, printing money and maintaining ATMs is a hassle anyway.
But, when we pay digitally, our every step remains recorded and thus almost everything can be learned about us.
The least talked about is something else - when we pay with plastic, we spend more and more easily than when we shake cash in the sun.
"Card purchases are faster, easier, and enable shopping from the comfort of your armchair." It's less 'painful' because we don't have the impression that we're giving money," Jelena Matanović, who specializes in marketing psychology, told our newsletter.
Researchers from Boston's famous MIT called it "matching". When the experience of spending is "paired" with giving bills from the wallet, then we value each dinar or dollar more.
When it is not - that is, when the disappearance of money is only visible later on the account - then we are big spenders.
The Copenhagen Business School survey looked at how much respondents were willing to pay for beer or coffee. They found that people give between twenty and fifty percent more when using a card compared to cash!
What do we even need?
Jelena Matanović says that "both the possibilities of delayed payment and purchase in installments also facilitate the purchase decision and enable us to reach the desired product with limited resources."
Although, the "desired product" is sometimes necessary, and sometimes it is a moment of weakness. The latter is called "impulsive buying", and Matanović warns that to a large extent such unnecessary waste of money takes place by ordering online.
Our interlocutor also states that, especially in countries like Serbia, there are many people who are planning a purchase and can hardly be misled because they have to take care of every dinar.
"The question is whether their behavior patterns differ from the behavior of people who have enough at their disposal, or whether they also buy more when they don't see the money they spent," says Matanović.
The answer to that question has to wait for some serious study.
However, there is good news for spenders. When you don't see your bills leaving your wallet, you enjoy the things you buy more.
If, for example, you're traveling on vacation with grumpy family members, and you won't be able to get through it because they'll be complaining for ten days that everything is expensive - bring a card instead of cash.
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