Possible Reason Why We Overspend

How advanced payment systems change customers' consumption behavior

June 02, 2019

I was listening to Atomic Habits, and the author of the book describes how to change our habits.

One chapter strikes me that human tends to choose an easier and simpler task over a harder and complex task because easier task gives us faster and immediate feedback and reward.

So, if we need to create a habit, we need to simplify the process. For example, if you want to go to a gym in the morning, you might want to place your gym clothes and running shoes next to your bed. In this way, you don't have to fight with your will power in the morning while you are looking for clothes and shoes.

On the contrary, we can make a bad habit difficult to process to prevent it. For example, if you watch TV too much and want to fix this habit, you can place a remote control in the closet after watching your favorite TV series. Next time, if you want to watch the TV series, you need to walk to the closet and take out the control to watch the TV.

As a developer and a formal game designer, I have observed many tech companies simplify their payment systems. A most common way to minimize ordering process is that saving a credit card information into their systems, So that later, users don't have to find a card and type card information to buy a product. I don't want to focus on the security issue, but I want to point out how a simplified payment system changes a customer's consumption habits.

Below is the list that I can think of areas where the places well implement a payment system.


Amazon took a step forward from saving credit card information. They have a payment system called 1-Click Ordering that if you click 1-Click Ordering button, you place the order, and there is no further action required. You don't need to fill out the form or a credit card information to buy a product. You only need to click the button.

I have experienced that I accidentally clicked the button, and I had to go through canceling the order process. As you guess, canceling order requires more steps than ordering an item.

Online Game

Many online games implement their digital currency. For example, you can charge 1500 golds by spending $15, and you get a discount if you spend more money on buying golds.

What is the benefit for the company that implements digital currency instead of using real money?

First, it eliminates the processes of finding a credit card and typing the card information later. Similar to Amazon's 1-click ordering, the only one step requires to buy a digital item is clicking a button, and you spend digital currency.

Second, it encourages gamers to spend more money by showing the remaining digital currency. People tend to spend more money if the process is simpler. Also, there might be a case where a digital item price is 1500 golds, and you have 1450 golds, which means you only need 50 golds to buy the item. 50 golds seem little, so it encourages gamers to charge digital currency again.

Digital Wallet

Apply Pay, Google Pay, and Samsung Pay is in this category. I don't carry cash anymore nowadays, and only carry 1 credit card and 1 debit card. Even some people don't carry a wallet anymore, and they use their phone and watch to buy a product. A benefit of using those payment systems is simplicity. Customers can complete their purchase without entering or showing their information. Sometimes we blame ourselves to spend too much money on unnecessary goods, and a few days later, we overspend again. Like a habit, at some points, we behave without thinking too much on spending money.

Our lives have become much simpler than past few years. Thanks to the advanced payment system, but if you think you spend too much money on something, you might think your behavior as a habit, and apply some techniques that Atomic Habits suggests.

Atomic Habits