Invisible money

Cover of Invisible money, Frontier Report No. 06

Frontier Report No. 06 · 18 pages · 14 sources

Do cashless payments make people spend more?

Yes, but less than often claimed. A 2024 review of 392 results found that paying without cash raised spending by a small amount, and that the effect had shrunk as people grew used to cards. Pay later raised total spending in US bank data and was followed by more overdraft charges for some users.

What the report found

  1. Cash is fading in the Gulf. In a Visa survey, only about 23 per cent of UAE consumers' transactions were made in cash. Saudi Arabia is moving the same way, with electronic payments rising to 79 per cent of retail payments in 2024.
  2. Pay later has grown fast. Providers in the Gulf now count customers in the millions. The UAE central bank regulated such credit in 2023, capping total limits at 20,000 dirhams or three months' income.
  3. Older research says paying less visibly means paying more. In one classic study, people bidding for sports tickets offered roughly twice as much when told they would pay by credit card rather than cash.
  4. The newest evidence says the effect is real but small, and shrinking. A 2024 review of 392 results found a small rise in spending with cashless payment, weaker in recent studies as people have grown used to cards.
  5. Pay later raises spending, and some users pay for it. Studies of American bank data found that total spending rose after people first used pay later, and that overdraft charges and credit card fees became more likely.

What is inside

  1. What is new
  2. What older research tells us
  3. What early studies suggest
  4. What nobody knows yet
  5. Questions worth watching

Plus UAE and Saudi payment data, a diagram of how felt each way of paying is, the UAE's pay later rules and a graded list of claims.

Who it is for

For banks, payment firms and retailers in the UAE and the Gulf, and anyone who has split a purchase into four.

How we work

Frontier Reports look at behaviour the textbooks have not yet caught up with. Every claim is graded Established, Emerging or Untested. Where researchers disagree, as they do on whether pay later is a tool or a trap, both sides are set out before we say where we stand.

Cite this report

The Why We Project (2026) Invisible money: Digital wallets, buy now pay later, and the pain of paying. Frontier Report No. 06. Dubai: Why We Tech Ltd. Available at: thewhyweproject.com