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Abstract

In this paper we investigate, with the help of recent behavioural economics findings, the various factors behind the decision of mobile payment adoption and the ways in which smartphone-enabled transactions may influence a person’s perception and the level of her spending. According to Eurostat, in 2018, three out of four people between the age of 16 and 74 years reported having used a mobile phone for private purposes. In the European Union, smartphones sum up more than 80% of all devices used in the private sector to access the Internet and the mobile services industry make up for Europe’s 3.3% of GDP. From checking the weather to trading on the stock exchange, for over a decade now, smartphones are replacing much more than just the traditional ways of communication. We wonder about whether mobile devices will eventually take the place paper notes or bank cards. The timing for this type of questions could not be better, as smartphone users become increasingly drawn to mobile payment and adoption rates rise across Europe. In this study we discuss the idea that mobile proximity payments may reduce the mental capacity of the user in processing the payment and may cause consumers to overspend. Numerous studies show that intensive usage of device-enabled payments can lead to addiction. Because modern cashless transactions are now designed to take place at much faster rates than ever before, smartphone payments poses the intrinsic ability to provide the user with immediate rewards and trigger addiction.

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