Does mobile payment use lead to overspending? The moderating role of financial knowledge

Although consumers have increasingly adopted mobile payments as a new payment method, little academic attention has been given to the consequences of mobile payment use and whether the relationship may vary by individual factors. The purpose of this study was to investigate whether and how mobile payment use influences financial behaviors, particularly overspending behaviors. This study focuses on three aspects of overspending behaviors: consumption, money management, and credit card behaviors. Using a consumer sample (N = 21,457) from the 2018 National Financial Capability Study (NFCS), our results showed that mobile payment users are at a much higher risk of overspending than non-users. We further examined the moderating role of financial knowledge in the relationship and found that having more financial knowledge helps buffer the extent to which mobile payments exacerbate overconsumption and difficulty with money management. The findings contribute to the mobile payment literature by empirically examining the consequences of adopting a new payment method. The findings have practical implications for service providers in the mobile payment industry on how to design and develop interventions to reduce the unfavorable effects of mobile payment use among consumers.