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Mobile payments users spend more, more often than consumers using traditional payments

December 4, 2018

Paying for consumer goods with a smartphone affects the overall transaction amount and frequency of purchases, according to new research co-written by a University of Illinois expert who studies operations management.

Yuqian Xu, a professor of business administration at Illinois, and her coauthors studied transaction data from one of the largest banks in China and found that, on average, consumers' total transaction amounts increased 2.4 percent after the adoption of the mobile payment channel, and that the total transaction frequency increased more than 23 percent, a press release said.

The researchers also found that the adoption of the mobile payment channel is associated with more self-indulgent shopping motivations.

"Switching to the mobile channel leads to more shopping overall, and it particularly affects more hedonistic shopping such as food, entertainment and travel," Xu said in the release. "But it doesn't affect purchases like education or health care. So it's changing consumer behavior."

The greatest impact came on less costly items that are purchased frequently, such as beverages and movie tickets.

"If you're in an industry with a high number of transactions or transaction frequency, it's really in your best interest to get ahead of the curve and embrace the mobile channel," Xu said.