Consumers' knowledge of cashless payments: Development, validation, and usability of a measurement scale

• Published date: 01 June 2022
• Author: Andrzej Cwynar,Beata Świecka,Kamil Filipek,Robert Porzak
• Date: 01 June 2022
• DOI: http://doi.org/10.1111/joca.12424

RESEARCH ARTICLE

Consumers' knowledge of cashless payments:

Development, validation, and usability of a

measurement scale

Andrzej Cwynar

1

| Beata Świecka

2

| Kamil Filipek

3

|

Robert Porzak

4

1

Institute of Public Administration and

Business, University of Economics and

Innovation, Lublin, Poland

2

Institute of Economics and Finance,

University of Szczecin, Szczecin, Poland

3

Institute of Sociology, Maria Curie-

Sklodowska University, Lublin, Poland

4

Experimental Psychology Lab, Faculty of

Human Sciences, University of

Economics and Innovation, Lublin,

Poland

Correspondence

Andrzej Cwynar, University of

Economics and Innovation, Projektowa

4, 20-209 Lublin, Poland.

Email: andrzej.cwynar@wsei.lublin.pl

Funding information

Ministerstwo Nauki i Szkolnictwa

Wyższego, Grant/Award Number: 001/

RID/2018/19

Abstract

The global digital shift, recently accelerated by the

COVID-19 pandemic, requires that consumers have

knowledge allowing them to navigate increasingly

cashless markets safely and effectively. To enable

valid and reliable measurement of such knowledge,

we used data obtained from a random sample of

adult Poles to develop and evaluate the psychometric

properties and applicability of an original cashless

payments knowledge scale (CPK scale). Our analyses

based on Item Response Theory show that some evi-

dent subdomains exist within the CPK construct. The

separate dimensions of the CPK merge into a coher-

ent scale with solid psychometric properties. We find

that the CPK score depends on the place of residence,

education, and household size, and is positively

related to safe cashless behavior. Our findings may

have important implications for financial institutions

as well as policymakers interested in segmenting

consumers in terms of their financial knowledge,

potential risks resulting from deficits in this knowledge,

and enhancing financial literacy.

Received: 23 October 2020 Revised: 20 July 2021 Accepted: 25 October 2021

DOI: 10.1111/joca.12424

© 2021 American Council on Consumer Interests.

640 J Consum Aff. 2022;56:640–665.

wileyonlinelibrary.com/journal/joca

KEYWORDS

cashless payments, card payments, mobile payments, online

payments, payment infrastructure, financial knowledge,

financial literacy, scale development

1|INTRODUCTION

Globally, the volume of cashless transactions grew at a compound annual growth rate of 10.8%

during 2013–2017 and is expected to grow by 12% between 2019 and 2023 (Capgemini, 2019,

2020). In the European Union (EU), the European Central Bank reports that in 2019 the total

number of cashless payment transactions involving non-monetary financial institutions reached

152.5 billion, rising swiftly at a rate of more than 8% in the two most recent years for which data

are available (European Central Bank, 2020). For comparison, in the United States the volume

reached 172 billion in 2019, growing in recent years at only a slightly slower pace compared to

the EU (Bank for International Settlements, 2021). Debit and credit cards have had the largest

shares in the volume of cashless payment transactions in both jurisdictions. The Bank for Inter-

national Settlements reports that residents of member countries of the Committee of Payments

and Market Infrastructures (CPMI) made debit and credit card purchases worth USD 15 trillion

in 2019 (Boar & Szemere, 2021). The COVID-19 pandemic has only amplified these trends

(Bruno et al., 2020; Capgemini, 2020). Politically imposed social distancing have resulted in a

more widespread turn to cashless payments, providing momentum to digitalization in general

and cashless transactions in particular.

Responsible participation in an increasingly cashless world requires appropriate knowledge

and the ability to apply this knowledge. On the one hand, despite inherent benefits, the adop-

tion of new financial products and services creates new risks that may encourage irresponsible

financial behavior. Recent literature shows that for cashless payments the risks are mainly

related to an increased propensity to overspend, with purchases often financed with credit

(Agarwal & Zhang, 2015; Dean et al., 2013; Lusardi et al., 2017), which may lead to a deteriora-

tion in well-being (Hunter & Heath, 2017). On the other hand, prior literature shows that an

effective way to prevent undesirable financial behavior is to increase financial literacy (see

Stolper & Walter, 2017, for an overview of relevant studies). Financial literacy education can be

treated as a kind of consumer protection instrument (Harasim & Klimontowicz, 2018). How-

ever, little is known about the extent to which consumers worldwide are equipped with

domain-specific knowledge and skills allowing them to navigate cashless media of payments

and related infrastructure safely and effectively. To a large extent, this research gap results from

the lack of rigorously developed and psychometrically tested instruments measuring how much

consumers know about cashless payments.

The aim of this study is to develop and validate an original scale to measure knowledge of

cashless payments understood as card payments, mobile payments and online payments. To

construct such a scale, we used primary data obtained from a survey conducted on a sample

representative for adult population of Poland. The responses were analyzed using Item

Response Theory (IRT) to develop and test a cashless payments knowledge scale (CPK scale).

The scale can serve both as a guide to develop similar scales for measuring other aspects of

financial literacy related to cashless financial products and services, and as an input to develop

an overall financial literacy scale. Such scales, including the one developed in our study, have

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