Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
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TY - JOUR
T1 - When do you pay? The business impact of payment time perception
AU - See-To, Eric Wing Kuen
PY - 2007/5
Y1 - 2007/5
N2 - Recent advances in consumer research have shown that the billing schedule has a significant impact on consumer decisions and consumption patterns. The strategy of devising different billing schedules to influence a customer's purchase decision (or choice of consumption pattern) is well accepted, and should be effective as long as billing schedules are exactly the same as the perceived payment outlays. Payment card technology makes the payment time perceived by consumers ambiguous and may enable the decoupling of payment outlay and billing schedule. If the decoupling hypothesis is supported, customers will no longer be subject to mental account manipulation by the payment scheme. Working with a large electronic payment service provider, we conducted a survey to collect data on usage and perception of payment cards in late 2003. Our results strongly support the decoupling hypothesis, and firms need to rethink their bundling and pricing strategies based on billing schedules. The possible use of this decoupling phenomenon to increase the willingness to pay of consumers and other managerial implications are discussed.
AB - Recent advances in consumer research have shown that the billing schedule has a significant impact on consumer decisions and consumption patterns. The strategy of devising different billing schedules to influence a customer's purchase decision (or choice of consumption pattern) is well accepted, and should be effective as long as billing schedules are exactly the same as the perceived payment outlays. Payment card technology makes the payment time perceived by consumers ambiguous and may enable the decoupling of payment outlay and billing schedule. If the decoupling hypothesis is supported, customers will no longer be subject to mental account manipulation by the payment scheme. Working with a large electronic payment service provider, we conducted a survey to collect data on usage and perception of payment cards in late 2003. Our results strongly support the decoupling hypothesis, and firms need to rethink their bundling and pricing strategies based on billing schedules. The possible use of this decoupling phenomenon to increase the willingness to pay of consumers and other managerial implications are discussed.
KW - mental accounting
KW - knowledge transfer
KW - learning by analogy
KW - categorization
KW - innovative technology
KW - payment card
U2 - 10.1080/10196780701296436
DO - 10.1080/10196780701296436
M3 - Journal article
VL - 17
SP - 153
EP - 163
JO - Electronic Markets
JF - Electronic Markets
SN - 1019-6781
IS - 2
ER -