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Tendency to overspend is more with cashless transactions

I cannot agree with Mr Ho San Cheow that the ease and accessibility of shopping using smartphone or smartwatch apps are unlikely to have negative repercussions, if parents teach their children to be frugal (Other ways to teach frugality than through physical cash; Sept 6).

In a culture that promotes materialism, shopping for immediate personal gratification is glorified. Compulsive spending is associated with an overwhelming urge to fill emotional needs.

The more removed customers are from cash transactions, the more they tend to spend.

After credit cards were introduced, consumers started using less cash, making it more difficult to keep track of actual spending.

Imagine how much more reckless shoppers will become after credit cards are stored in their smartphones.

After all, the average person handles his mobile phone far more often than he reaches for his wallet on a typical day.

It would be naive to believe that the young and impressionable can be easily convinced not to shop on impulse, or expect commercial entities to exercise social responsibility by protecting the vulnerable from spending beyond their means.

It is in the interest of retailers and financial institutions to make it fast and convenient for a person to complete a transaction and spend more.

With the current easy access to credit, parents need help from the authorities to prevent their children from falling prey to uncontrolled spending.

Developers of mobile payment systems must be compelled by law to design safeguards to stop those under the age of 18 from utilising cashless modes of payment through smartphone or smartwatch apps.

Every consumer must also take responsibility for spending within his means.

Edmund Khoo Kim Hock

A version of this article appeared in the print edition of The Sunday Times on September 24, 2017, with the headline 'Tendency to overspend is more with cashless transactions'. Print Edition | Subscribe