Psychology of money and new methods of payment. Generational differences towards a cashless society

The advent of the digital transformation and the progressive dematerialization\r\nof money is changing the way consumers relate to it. The\r\nincreasing spread of new forms of electronic and virtual payment (e.g.,\r\ncredit cards, apps, and cryptocurrencies) is progressively replacing the\r\nuse of cash, thus contributing to modifying how people think and feel\r\nabout money. For these reasons, a comparison between younger generations\r\n(Gen Z, known for growing up in a digital and virtual world) and\r\nolder ones, who grew up in a time when cash circulated to a greater extent,\r\nis particularly interesting. The purpose of this study is to carry out\r\nan initial exploration of the topic, investigating the different representations\r\nof money (cash vs. electronic) across generations, in terms of preferences,\r\nusage approaches, and the emotional experiences that go along\r\nwith different payment methods. A qualitative research design was\r\nadopted, using semi-structured interviews to identify preferences, habits,\r\napproaches, attitudes, and opinions related to money and different\r\nmethods of payment among different generations. Projective techniques\r\nwere also employed through the provision of visual stimuli depicting\r\ndifferent methods of payment (cash vs. electronic) in order to elicit representations\r\nand experiences related to different forms of money. The\r\nanalysis of the interviews suggested some differences among generations\r\nin their approach to different payment methods. Generation Z tends to\r\nthink about electronic money as a separate account than cash, the latter\r\nbeing often perceived as «already consumed» and disposable money.\r\nIn contrast, older generations are more likely to perceive cash not as\r\na separate account from the rest of their wealth, but rather as a store\r\nof value. Furthermore, people from senior generations express a strong\r\naffection for cash, a feeling which is not shared by younger individuals.\r\nFinally, individuals from Generation Z can be differentiated according\r\nto the life stage they are living. Students are still more attached to cash,\r\nwhich is felt as a means to exert self-control, while workers acknowledge\r\nan opposite sensation of lack of regulation while using cash. The\r\npresent study takes a deep dive into a topic which has often been disregarded\r\nin past research. Given the advent of new forms of payment,\r\nour study provides additional understanding of how individuals differ\r\nin their attitudes toward electronic and cash money. Given the purely\r\nqualitative nature of the study, further investigation and confirmation of\r\nthe results through quantitative research study designs is needed. Furthermore,\r\nthe study was conducted in Italy, and future research might\r\nbe conducted in other countries to examine the extent to which our\r\nfindings apply cross-culturally. Understanding and identifying different\r\ngenerations’ approaches towards money and different methods of payment\r\ncan have important practical implications for companies operating\r\nin a variety of industries (from retail to e-commerce) and for institutions\r\nin the credit and finance sector, enabling them to respond more\r\nadequately to changing purchasing and consumption habits.