“Retailers should be particularly excited for Monday’s debut of Apple Pay, which promises to be an excellent tool for separating shoppers and their money,” Kyle Stock reports for Bloomberg.
“Apple’s mobile payment service will let iPhone users buy things by simply pulling out their device. Researchers have long found that shoppers spend more the further they get from handling actual currency and tend to better remember cash transactions. These tendencies help explain why credit card balances tend to bloat and why casinos use chips in place of money. It’s also why companies such as Starbucks encourage customers to load money onto apps or prepaid cards,” Stock reports. “Behavioral economists have a term for this dynamic: decoupling. The card or app or casino chip mentally separates the consumer from his bank account. The payment is both delayed and bundled with other charges so it doesn’t seem so painful. Citibank tested the research in 2009 and found a mobile “tap to pay” pilot program significantly boosted both the number and size of consumer transactions.”
“Apple Pay doesn’t require any swiping or tapping, which seems to suggest a new level of abstraction,” Stock reports. “With a fingerprint on the iPhone button and a little wave at the cash register, the deal is done.”
Read more in the full article here.
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