When do you pay? The business impact of payment time perception

See-To, Eric Wing Kuen (2007) When do you pay? The business impact of payment time perception. Electronic Markets, 17 (2). pp. 153-163. ISSN 1019-6781

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Abstract

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.

Item Type: Journal Article
Journal or Publication Title: Electronic Markets
Uncontrolled Keywords: /dk/atira/pure/subjectarea/aacsb/disciplinebasedresearch
Subjects:
Departments: Lancaster University Management School > Management Science
ID Code: 44724
Deposited By: ep_importer_pure
Deposited On: 11 Jul 2011 18:20
Refereed?: Yes
Published?: Published
Last Modified: 02 Oct 2019 01:11
URI: https://eprints.lancs.ac.uk/id/eprint/44724

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