Pain of paying

The pain of paying is a concept from Behavioral Economics and Behavioral Science, coined in 1996 by Ofer Zellermayer, whilst writing his PhD dissertation at the University of Carnegie Mellon, under supervision of George Loewenstein. The term refers to the negative emotions experienced during the process of paying for a good or service. In other words, to make this simpler to understand, the more a purchase hurts, the less people are willing to make this purchase. During the payment process, the handing over of money is akin to losing money. As most people are loss averse, this is experienced as a negative feeling, and as such can also be used to avoid or reduce spending. In 2023, Farnoush Reshadi and M. Paula Fitzgerald reviewed the literature on pain of payment and offered a new definition of pain of payment that distinguishes between two types of pain of payment: immediate and anticipated. Immediate pain of payment is “the negative psychological affective reaction consumers experience immediately after they become cognizant that they have lost a certain amount of their financial resources.” Anticipated pain of payment is “the negative psychological affective reaction consumers experience when they become cognizant that they will or may lose a certain amount of their financial resources in the future.” These new definitions consider that pain of payment can be experienced both after and before making payments, can be experienced when losing any type of financial resource that can act as a source of security, and is only evoked when consumers become aware of the financial loss. The pain of paying has been tested in several contexts, and has been found to differ per payment method. The pain of paying is often heralded as a tool to curb individuals' spending.

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