Spending surges as people drop cash for taps during pandemic
Cash has become a major coronavirus casualty, with the shift away from bank notes and coins speeding up amid transmission concerns.
But behavioural psychologists say the trend is costing us money.
Tapping to pay may not trigger the key biological hurdle that cash does, according to Dr Paul Harrison, professor of consumer behavioural and psychology at Deakin University.
"What's interesting is the bilateral insula, which is the part of the brain that feels pain, actually also feels pain when we hand over cash," Dr Harrison told 9News.
The same pain isn't felt when we pay by tapping.
Without that biological blocker, Dr Harrison says our spending habits are impacted.
"For some events and situations people spend up to 115 percent more when they use a card of some kind instead of cash," he said.
The warning comes as cash use plunges.
Covid-19 is killing cash
Data provided to 9News from ANZ shows ATM withdrawals were down 40 per cent between March and May compared with the same period in last year.
Meanwhile, the same period saw mobile phone payments grow 41 percent by volume and 59 percent by value.
Put another way, the bank registered almost 13 million more 'taps' in those three months than during the same period last year.
"Cash has been on its way out – it's certainly not dead – and mobile payments have been on the way up, but over the last three months those things have accelerated rapidly," ANZ general manager of deposits Shannon Peachey said.
"I think we will continue to see cash go down, particularly as businesses choose to accept it less and less."
Businesses going cash-free
Industry Beans, a café chain spanning Melbourne, Sydney and Brisbane, has transitioned to a no-cash business.
"When we started our first couple of cafes [around nine years ago], cash was generally around 60 percent of the sales," Industry Beans co-founder Trevor Simmons told 9News.
"And then all of a sudden around five years ago there was a dramatic decrease in the amount of cash being transacted as people moved to using their phones for payments and were happy to pay 'contactless' for smaller payments."
The shift away from cash was consumer-driven, according to Mr Simmons, and the first fully non-cash day came after a transition period of three months.
How to short-circuit the 'tap' frenzy
With our propensity to spend significantly higher when cash doesn't play a part, experts say the risk of losing track of your finances has increased.
The advice? Slow down the purchase process.
"The technology has moved a lot faster than our evolutionary and biological processes," Dr Harrison said.
"So, it is very much about slowing down the process as much as possible … talking to others as you're buying something.
"Also having an internal monologue with yourself … 'do I really want this?'. It sounds bizarre and you don't want to say it out loud, but it is about talking to yourself and slowing down that process."