Psychology of Money and New Methods of Payment. Generational Differences Towards a Cashless Society

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