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The Effects of Immediate and Delayed Payments on Consumption Behavior

Arvind Agrawal, University of Nebraska - Lincoln


Payment-timing is conceptualized as a payment instrument focal characteristic to explain differences in consumers’ purchasing behavior when they chose to pay-now versus pay-later. Payment-timing preferences represent consumers’ attitudes, beliefs, and motivation for delaying or not delaying marketing transaction payments. Cash, debit cards, and online banking represented consumers’ preferences to pay-now, while credit cards and loans represented the inclination to pay-later. There were four key findings: Firstly, I present payment-timing models that theorize consumers’ choice of payment types with differences in payment-timing and motivations to pay for purchases. Two models are presented that unify the following attitudes and motivations: (1) five attitudinal antecedents to consumers’ preferences for payment-timing: regulatory focus, heuristics, self-construal, perceived financial constraint, and extent of financial literacy; (2) five motivations that explain consumers’ likelihood of purchase with payment types with differences in payment-timing: the pain of payment, pain of mismatched payments, rewards orientation, debt aversion, and decision construal; and (3) visualizing moral responsibility as a moderator to the pain of payment and economic motivation as a moderator to rewards availability. ^ Secondly, consumers had a greater likelihood of purchasing when paying later (with credit cards) versus paying now (with debit cards) in the context of high-dollar purchases ($1200 and above). Moreover, when paying later consumers preferred quality purchases versus buying multiple items for an equivalent amount. ^ Thirdly, there was no support found for the influence of the pain of payment on consumers’ purchase likelihood in the context of paying now with debit cards versus paying later with credit cards. Fourthly, external stimulation of consumers’ regulatory focus resulted in influencing their selection of payment types with differences in payment-timing and purchase likelihood. Promotion focus resulted in preferences to pay-later as compared to prevention focus that resulted in preferences to pay-now. Also, promotion focus led to a higher likelihood of purchase as compared to prevention focus.^

Subject Area

Marketing|Behavioral psychology|Social psychology

Recommended Citation

Agrawal, Arvind, "The Effects of Immediate and Delayed Payments on Consumption Behavior" (2018). ETD collection for University of Nebraska - Lincoln. AAI10837673.