Before I started this sentence, I started my day with some light consumerism. A journey on the tube. Tap. Train tickets. Tap. A coffee whilst I wait, a paper, some lunch for the journey. Tap, tap, tap. We’re rapidly becoming a cashless society. Credit and debit cards have long had a dominant role in our spending habits. Now contactless payment cards, and mobile payment systems are threatening to remove the concept of cash entirely.
From the Blue Cross’s Tap Dogs initiative to Cancer Research UK’s digital collection tins for World Cancer Day, fundraising teams are seizing the contactless opportunities. But does the way you pay change how you spend, how much you value what you’ve paid for or how committed you are to a brand? Research suggests it does.
It seems with plastic we’re just not tuned in to the actual amount of money we’re spending. Handing over a material object has a fundamentally different psychological impact from simply waving a card or mobile over a scanner. The tangibility of notes and coins creates an awareness that something of value is being exchanged. A 2014 study led by researchers at Copenhagen Business School argued that consumers separate consumption from payment when using cards. This could be due to the "money illusion", where we judge the value of an object by its size, shape and colour. If we use a more distant form of payment, we are more willing to pay prior to purchase and will spend more at the time of purchase. Potentially great news for fundraising.
But parting with money is more than just a financial transaction. Research by Drazen Prelec and George Loewenstein at the turn of the century found that we experience psychological pain as we spend that goes above and beyond the economic cost, and that different forms of money evoke more or less pain. In 2010, consumer psychologist Manoj Thomas found that the pain felt when paying by cash was numbed with card payments.
Why does the "pain" we feel matter? Because, according to James Gross of Stanford University, we value the outcome more if we have gone through physical or emotional pain. This is as true for what we consume as what we experience. The more psychological pain we feel, the more we value what we’ve paid for, and the more committed we are to the brand associated with it.
Experiments at Duke University, published in 2015, found that increased pain of payment resulted in repeat donations and more likelihood to publicly display support.
What questions does this raise for fundraising? Tap Dogs is a great combination of direct contact with the Blue Cross’s work and ease of payment. But not all campaigns lend themselves to this. It could be cynically argued that the psychological distance of contactless allows us to increase the amount individuals give. But we need to ask ourselves how, given both the lower mental connection and limited data capture of contactless, we can convert "pay and go" donors into committed advocates.
Perhaps we should worry less about how touching sandpaper increases donations and more about how touchless technology decreases commitment to our causes.
Charlotte Beckett is a freelance digital strategist and consumer behaviour specialist