Have you ever found yourself feeling reluctant when handing over cash to someone? As if you would do anything to avoid spending that hard-earned money if you could?
Yet, most people feel absolutely no regret spending the same amount through an online transaction, such as UPI. This reaction is not random; it is a concept backed by psychology.
What Is The Pain Of Paying?
The pain of paying is a psychological concept that refers to the feeling of discomfort, sadness, or loss one experiences when spending money on a product or service.
According to a 2024 study published on ScienceDirect titled Paying in a Blink of an Eye: It Hurts Less, but You Spend More, “Pain of payment is the negative psychological affect consumers experience when they become cognisant that they have lost a certain amount of their financial resources (immediate pain) or when they become aware that they will or may lose a certain amount of their financial resources in the future (anticipated pain).”
This negative emotional response is most commonly associated with cash payments, which are tangible and make the loss feel real and immediate. Digital transactions, on the other hand, do not evoke the same response because the loss is not physical, often leading to overspending.
According to George Loewenstein, professor at Carnegie Mellon University, “Credit cards effectively anaesthetise the pain of paying.” He adds, “You swipe the card, and it doesn’t feel like you’re giving anything up to make the purchase, unlike paying cash, where you have to hand over bills.”
Experts consider online payments to be the least painful method of payment. As noted in the National Institutes of Health’s 2024 journal Why Does Mobile Payment Promote Purchases? Revisiting the Pain of Paying and Understanding the Implicit Pleasure via Selective Attention, this may be because, when using QR-based payments, the act of giving money is unseen and therefore intangible.
The journal further highlights that “consumers often use smartphones and payment applications for non-payment tasks (e.g. chatting with others and browsing social media) before or even at the time of making payment, which distracts consumers from the payment process and weakens the distinctiveness of payment, thereby further reducing the pain of money loss.”
Read More: Watch: 5 Money Habits India’s Gen Z Think Are Smart But Experts Disagree
The Science Behind This
According to the NIH report Pleasure of Paying When Using Mobile Payment: Evidence from EEG Studies, while the pain of paying is experienced during cash transactions, digital payments stimulate what researchers call the “pleasure of paying”.
Mukesh Pandey, Director of Rupyaa Paisa, explains, “Your brain has a different perspective towards a ₹500 bill than towards ₹500 spent via UPI. Cash has a physicality that creates a sense of loss. Digital money creates more emotional distance, making it easier to spend.
UPI has changed purchasing psychology, as seen in over 11,761 crore UPI transactions worth ₹180 lakh crore in FY 2024–25, representing 84 per cent of India’s retail digital spending. Consumers today are spending more fluidly, budgeting less consciously, and redefining affordability in a rapidly digitising economy.”
The concept of the “pleasure of paying” suggests that the brain links cashless payments through UPI (Unified Payments Interface) to positive emotions and may even perceive them as rewarding.
Vidhi Ashok Bhatt, CEO and Co-founder of LIGHT, explains, “Money always matters, and Indian consumers have always been conscious of how they spend it. While a ₹500 note in the wallet is often preserved, UPI payments are weighed against the available bank balance, which is usually higher.
UPI is an intent-based payment system. Frictionless payments haven’t made people careless, just more effortless. Today’s consumers are far more aware and informed; the decision-making lies in whether to buy, not how to pay.”
This ease can stimulate mindless spending, often causing people to lose track of their budgets. Because the act of paying is no longer associated with a tangible loss, small and frequent digital payments may feel insignificant individually, but can add up to a significant financial strain.
Ways To Spend Mindfully In The Digital Economy
Digital payments often eliminate the psychological pause that traditionally accompanies spending. When the mode of payment is digital, spending becomes automatic, often reduced to a single click rather than a conscious decision.
Dr Sandeep Vohra, psychiatrist and founder of NWNT.ai, explains, “Our brains aren’t naturally wired for digital money. When you hand over a ₹500 note, the physical action creates a moment of discomfort, the pain of paying. With UPI or other seamless digital payments, that sensory experience disappears.
The absence of physical cash short-circuits that moment of hesitation, encouraging more impulsive decisions. Over time, this detaches us emotionally from money, as the act of parting with it now happens quietly, almost invisibly, in the background.”
Here are some ways to avoid mindless digital spending:
- Track your budget: Whether cash or cashless, tracking expenses builds financial responsibility.
- Use small cash amounts: Frequent small digital payments can accumulate quickly. Carrying limited cash can help curb unnecessary spending.
- Set fixed spending limits: Restricting spending beyond a set threshold can prevent mindless purchases.
- Slow down the payment process: Pausing before clicking “pay” helps distinguish between necessity and impulse.
Ultimately, mindful spending does not require abandoning digital technology. It requires awareness. In a world where money moves with a tap on a screen, conscious financial behaviour is no longer optional.
Images: Google Images
Sources: National Institutes of Health, Mint, Times of India
Find the blogger: @shubhangichoudhary_29
This post is tagged under: pain of paying, psychology of money, digital payments, UPI spending, cash vs digital, consumer psychology, behavioural economics, overspending, financial psychology, mindful spending, digital economy, spending habits, mobile payments, India UPI, personal finance psychology
Disclaimer: We do not hold any right or copyright over any of the images used; these have been taken from Google. In case of credits or removal, the owner may kindly email us.
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