Students' Payment Preferences

Introduction. Theoretical framework. Literature review. Students’ payment preferences under certain circumstances. Social costs. Location. Motives behind choosing the payment type. Privacy. Convenience. Hypothesis. Research design. Dependent variable. Payment type. Independent variables. Size of the payment. Location of the payment. Attitude towards security issues. Availability of discount. Research methods. Data collection and analysis method. Empirical research. Sampling and data collection process. Presentation of data. Hypothesis testing and interpretation of data.

This research looks into students' payment preferences, and what influences their payment decisions. Sample consists of Lithuanian students from ISM University of Management and Economics in Vilnius. We have analyzed different factors which encourages students to prefer either cash or card payment.

We formulated four hypotheses after analyzing literature review regarding our topic. First, we wanted to find out how concern about security influence students’ payment choice. Secondly, besides the security, were looked at how the increase in price of the transaction caused the students to pay by card rather than by cash. Third factor at which we looked at, was location, where does the payment was made and does there was available the payment terminal. The fourth factor, we considered how does the availability of the card/cash discount influenced students’ choice. To address those questions we conducted an online diary, which was filled by 30 respondents.

The result of our research showed that only two factors such as security and the value of purchase did have an influence on students’ payment choice. Therefore, the main motives behind their payment choice were their concern over security of their payment, and the value of their transactions.

In our research we are focusing on ISM University of Management and Economics’ student to find out the motives behind their payment choices. Considering a growing concern over card payment advantages, we are interested in factor that encourage young people, in our case students from 18 to 25 years old, to prefer one payment type to another.

By analyzing previous research on cash or card payment preferences and banks’ working papers, four hypotheses were derived. A comprehension of social cost reduction for all involved while making card transactions is proving the relevance of a research topic. From the literature review, first hypothesis is suggesting that students concerned about security issues tend to pay less by cash. Second hypothesis is stating that the higher price paid for the product/service purchased, the higher the probability of paying by card among students. Third hypothesis says that location where students prefer to pay by card differs from the location where students choose to pay by cash. Fourth hypothesis suggests that the availability of premium/discount increases the chances of students choosing the payment type for which premium/discount is designed.

An ethnography method is used for this research. Screening variable of age was used while choosing respondents. A sample of 30 students from ISM University of Management and Economics were selected using quota framing to represent the population. Students were using an online diary tool for two weeks to keep a record of the transactions made each day. Data collection period was from 1st of April till 15th of April.