Paying with your phone is handy... until you find out how much more you spend

Researchers found that mobile wallet users completed 23 percent more transactions, compared to alternative forms of payment.

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By Alyssa Newcomb

More Americans than ever are ditching cash in favor of other forms of payment, whether it's a debit or credit card, or a mobile wallet — but a new study shows that people who use mobile wallets make 23 percent more purchases and spend an average of 2.4 percent more per transaction.

Researchers at the University of Illinois at Urbana-Champaign studied consumers in China, where mobile payment adoption is widespread and could be a bellwether as mobile wallets gain popularity in the United States spend more per transaction and make more frequent purchases. They used transaction data from one of China’s largest banks and Alipay, a mobile payment platform, to study how the shift from plastic to mobile payments affected spending habits.

"Switching to the mobile channel leads to more shopping overall, and it particularly affects more hedonistic shopping such as food, entertainment and travel," Yuqian Xu, a professor of business administration and one of the authors of the study, said in a news release. "But it doesn't affect purchases like education or health care. So it's changing consumer behavior."

This year, 29 percent of Americans said that in a typical week, they made none of their purchases with cash, according to a survey from the Pew Research Center. That's up from 24 percent in 2015. By 2020, 90 percent of smartphone users in the United States will have used some form of mobile payments, according to a report from Zion Market Research.

Among the most popular mobile wallets in the United States are Apple Pay, Samsung Pay, Android Pay and Walmart Pay, with each having their own limitations, including device compatibility and where they can be used.

Apple Pay is expected to account for half of all mobile wallet usage by 2020, according to a report from Juniper Research. However, a survey from reported that 13 percent of smartphone users in the United States had tried it. Of the respondents in the United States, 3 percent said they used Apple Pay during their last shopping trip.

While mobile wallet adoption is growing in the United States, there is some good news from the University of Illinois study that shows it may all actually even out in the end. People charged 3.9 percent less on their physical credit cards after they started using Alipay, according to the study. However, they spent 0.3 percent more making payments through a computer.

With the average American set to spend $1,007.24 during the holiday shopping season, it’s a reminder that the ease of tapping a smartphone or swiping a card to pay can easily make a shopper forget about how much they’re really spending.

It’s also another example of how technology can prompt consumers to spend more money. As more people and businesses embrace going cashless, there’s been a rise in a new phenomenon known as “guilt tipping.”

After a cashier swipes a customer’s card on a tablet-based payment system, such as Square, Revel, or ShopKeep, they’re usually presented with a tip screen and several buttons to choose the percentage they want to tip, or they can press the alternative “no tip” right in front of the cashier.

Data from Square, which was shared with NBC News earlier this year, reported the average tip using their platform in bakeries in the United States was 14.56 percent; 17.24 percent in bars and clubs, and 16.01 percent at food trucks, a place where in the past people may have simply thrown loose change or a buck in the tip jar.