New Study Reveals 'Pain of Payment' Linked to Emotional Distress

A new study published in the Journal of Economic Behavior & Organization has found that the act of paying for goods and services activates brain regions associated with emotional pain. Researchers used fMRI scans to observe brain activity during purchasing decisions, identifying activity in the anterior insula. The intensity of this response correlated with the amount of money participants were asked to pay, suggesting that this 'pain of payment' is not merely a passive feeling but can actively influence how much individuals are willing to spend.

In one experiment, scientists were able to redirect participants' discomfort by attributing the unpleasant sensation to an external factor. Those who were led to believe their unease stemmed from something else were willing to pay approximately 50% more for a gift card compared to a control group. This suggests that by distancing consumers from the tangible act of parting with cash, payment methods like credit cards or installment plans might alter purchasing behavior.

Separately, recent data from Israel indicates a growing trend in installment payments. According to Menora ERN, the number of standing order transactions in June 2026 surged by about 64% compared to June 2025, with the total amount increasing by approximately 79%. The average standing order transaction was around 12,900 shekels. Average check transactions reached about 3,230 shekels, a 23% increase year-over-year. Significant jumps were observed in expenses like car repairs, with standing orders rising 250%, and dental treatments, up 80%, both averaging around 15,000 shekels per transaction. However, these Israeli figures are not directly linked to the study and do not confirm 'pain of payment' as the sole cause for the rise in installment plans, but rather highlight a parallel trend of spreading payments over time.