Digital Payments and Emotional Distance: An Empirical Study of their Influence on Consumer Spending Behaviour

Abstract

The use of digital payments has altered consumer financial behaviour since these forms of transaction do not require face-to-face interactions. In this paper, an investigation was conducted to evaluate the impact of digital payment usage on emotional distance and consumer spending behaviour while examining the role of emotional distance. A quantitative research method was employed with data collected through structured questionnaires administered to 412 retail consumers. Reliability analysis, correlation, and multiple regression were used to analyze the collected data. It is observed that there is a significant relationship between digital payment usage and emotional distance (β = 0.41, p < 0.001) as well as consumer spending behaviour (β = 0.29, p < 0.001). Emotional distance positively impacts consumer spending behaviour (β = 0.52, p < 0.001). The results of mediation analysis show that there is an indirect relationship between digital payment usage and consumer spending behaviour through the mediator variable emotional distance, which is statistically significant (a × b = 0.213). The model explains 57.8% of the variation in consumer spending behaviour, according to mediation analysis (R2 = 0.578). This implies that the findings demonstrate that digital payment systems lower psychological pain related to payment, hence increasing spending behaviour. These findings offer contributions to the literature on behavioral finance and fintech by offering insights into the psychological basis of cashless payments.