INTRODUCTION
Consumers today are more likely to purchase a product on a whim, regardless of whether they are shopping online or in-store. Consumers become increasingly prone to making rash decisions as time passes. Numerous individuals engage in more casual or compulsive shopping, particularly via online channels. As technologies have advanced, debit and credit cards, e-wallets with quick response (QR) code options, contactless cards such as SamsungPay, ApplePay, MAE, and the Buy-Now-Pay-Later (BNPL) feature, as well as many others have become more prevalent, thereby accelerating the process of making a purchase. With mobile wallets gaining the most traction among first-time users (33%) followed by online cards (30%) and QR code payments (26%), cashless payments are on the rise (Visa, 2022). As a result of this significant shift in consumer behaviour and the widespread adoption of digital payment methods, Malaysia is gradually becoming a cashless society.
IMPULSE BUYING BEHAVIOUR
The term "impulse buying" describes a type of shopping behaviour characterised by a strong desire to make an unplanned purchase despite negative emotional and rational considerations (Zhao et al., 2022). Customers have access to a variety of payment options, thus allowing them to purchase their desired items quickly and easily. Moreover, compared to those who pay with cash, consumers who use credit cards or other electronic payment systems tend to underestimate their expenditures (Xu et al., 2022). Consequently, consumers are likely to make impulsive purchases as they can pay with a single click or wave. They will not give their purchases much thought, leading them to act impulsively. In fact, a Bankrate study found that 64% of the shoppers who purchased something from an advertisement said that they regretted at least one of these purchases (Foster, 2022).
Retailers and other industries such as the food and beverage industry are pressured to adapt their customer service strategies because of changing consumer preferences. According to the Visa Consumer Payment Attitudes study, most Malaysians (55%) can go cashless for more than a week, and 74% of consumers in Malaysia have successfully gone cashless, with most digital payments being made using the card online (70%), contactless card (56%), and mobile contactless payment (32%). The study also reported that 93% of Southeast Asian consumers use a variety of cashless payment methods such as cards, contactless cards, mobile contactless, mobile wallets, and QR code payments (Visa, 2022). This is led by consumers from Singapore (97%), Malaysia (96%), Indonesia (95%), and Vietnam (95%). Other than that, the study reported that most consumers did not only view cashless payment as a safe option, but they also supported their governments' plans to transform their countries into cashless societies.
Using radio frequency identification (RFID) and near-field communication (NFC) technologies, these contactless payment methods enable customers to pay with debit and/or credit cards or smartphones. Payments made with a contactless card, for example, do not require a personal identification number (PIN) or signature, thereby expediting the transaction. Given that this reduces the time spent contemplating a purchase, it may encourage impulsive purchases. 49 Moreover, the BNPL option encourages consumers to purchase products without waiting for a financial emergency. Over one-third of shoppers (35%) say they will continue to make impulsive purchases during inflation because the price is "too good to pass up" (Foster, 2022). As a means of ensuring that they can continue living as they have been, they will seek it out. Since they can now purchase an item for which they have not had time to save, they are more likely to make a large purchase quickly.
Cashless payments are becoming increasingly common among younger consumers including Millennials and Generation Z, as they are the primary drivers of this trend. Using an e-wallet to make a purchase is enjoyable for these generations of consumers, and this has a positive impact on their propensity to make impulsive purchases (Lee et al., 2022). The preference of young customers for cashless payment methods influences their shopping frequency. They are prone more to making impulsive purchases compared to other generations. This may result in these young consumers incurring excessive debts. Therefore, it is crucial for both marketers and consumers to gain an understanding of what motivates young buyers to make impulsive purchases and to develop effective tools to combat this behaviour.
As a part of the government's initiative to "transform Malaysia into a digitally driven, high income nation and a regional leader in the digital economy," Universiti Teknologi MARA (UiTM) has adopted cashless payment and is poised to become Malaysia's largest cashless campus. The "UiTM Go Cashless – Make Life Easier" slogan has been applied to UiTM campuses as a part of the initiative to migrate from cash to cashless payments. UiTM and Merchantrade have recently signed a Memorandum of Understanding (MoU) to provide a digital wallet service to international and outbound students enrolled in UiTM, the University’s employees as well as a million active alumni members (Ignatius, 2023). Students and staff of UiTM, who are also among the Millennials and Generation Z, will be able to conduct financial transactions digitally, exchange digital currency, manage their card settings, and routinely track their expenses.
CONCLUSION
The proliferation of cashless payment methods among Malaysian consumers contributes to economic growth. Consumers can now make purchases online and offline using a variety of payment options provided by retailers. Since the convenience of cashless payment methods offered by merchants encourages consumers to make impulsive purchases, consumers must manage and plan their financial flow. Individuals who make impulsive purchases could jeopardise their financial planning as they may incur debt and be unable to manage their financial situation. In response to public financial planning crises, marketers should remain vigilant and continue monitoring the consumer base to distinguish between true demands and impulsive purchases.
REFERENCE
Foster, S. (2022). Social media is making you more prone to impulse purchases – here’s how to avoid buyer’s remorse. The Star. https://www.thestar.com.my/tech/technews/2022/08/29/steps-to-stop-impulse-buying
Ignatius, C. (2023). UiTM, Merchantrade Collaborate To Provide Digital Wallet Service. Business Today. https://www.businesstoday.com.my/2023/01/30/uitm-merchantrade-collaborateto-provide-digital-wallet-service/
Lee, Y. Y., Gan, C. L., & Liew, T. W. (2022). Do E-wallets trigger impulse purchases? An analysis of Malaysian Gen-Y and Gen-Z consumers. Journal of Marketing Analytics, 0123456789. https://doi.org/10.1057/s41270-022-00164-9 50
Visa. (2022). Visa Consumer Payment Attitudes Study 2022 - Navigating a New Era in Payments. https://my.review.visa.com/dam/VCOM/regional/ap/documents/visa-cpa-report-smt2022.pdf
Xu, C., Unger, A., Bi, C., Papastamatelou, J., & Raab, G. (2022). The influence of Internet shopping and use of credit cards on gender differences in compulsive buying. Journal of Internet and Digital Economics, 2(1), 27–45. https://doi.org/10.1108/jide-11-2021-0017
Zhao, S., Yang, Q., Im, H., Ye, B., Zeng, Y., Chen, Z., Liu, L., & Huang, D. (2022). The impulsive online shopper: Effects of Covid‑19 burnout, uncertainty, self‑control, and online shopping trust. Future Business Journal, 8(1), 1–58. https://doi.org/10.1186/s43093-022-00174-0
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