Payment Pulse – Ep. 3

Payment Pulse: The Power of Social Proof: Learn how influencer endorsements, online reviews, and peer behavior shape our buying habits.

Status Spending and Luxury Psychology: Understand why consumers use high-end payment methods to signal prestige and how brands capitalize on the “Keeping up with the Joneses” mentality.

FOMO and Impulse Purchases: Explore the role of limited-time offers and BNPL services in reducing purchase friction and triggering rapid spending.

Digital Trends on Social Media: See how platforms like Instagram, TikTok, and YouTube are revolutionizing product discovery and checkout experiences.

Cultural Influences on Spending: Discover how global payment preferences vary and why adapting to local norms is key for businesses expanding into new markets.

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Episode Transcript

Steve: Welcome to Payment Pulse, a podcast by Clearent by Xplor where we aim to simplify and humanize the complex world of payments. I’m Steve, and as always, I’m here with my co-host. Max, how you doing today, man?

Max: I’m good, Steve. It’s a beautiful day out and we’re talking, talking about payments. It’s going to be a good one. How are you?

Steve: Good, man. Yeah, I mean, I’m definitely sick of this cold ready to move on to nicer weather, but yeah, I’m excited to jump into it.

And so, today’s episode is, you know, another segment of our micro-series where we’re breaking down consumer spending behaviors.

You know, the, the broader topic is how social influences shape consumer spending behavior. We’re going to take a look at the psychological and cultural factors that drive purchasing decisions, whether that’s, you know, peer pressure, social norms, or the latest viral trends. Consumers rarely make decisions, you know, in isolation.

Steve: There’s always an outside factor that is contributing to that decision. And understanding these social factors can help businesses optimize, their checkout experience, loyalty programs, payment options. All with the goal of ultimately driving more business for them.

Max: Yeah, that, it’s going to be an awesome one, Steve. So, you know as the resident marketing guy on this podcast we’re not going to, we’re going to have you kind of be our subject matter expert today. I’ll ask the questions and hopefully learn a lot along the way. So, let’s start with the basics. We’re talking about the power of social proof in payments and the influence of social influences on how we spend money and where we spend money and with what we spend money.

And so let’s start with the basics. What underpins social pressures associated with how we pay for things?

Steve: What really underpins all of this is the concept of social proof, which is the idea that people look to others when making purchasing decisions.

You know, if you see your friends or influencers or a majority of people choosing a particular product service or payment method, you’re more likely to do the same. And we’ll dive more into it, but obviously in the world of social media and access to phones and the internet, basically, it’s a lot easier and there’s a much greater influence.

Max: Yeah, that makes sense. I guess you see it everywhere, right? I’m thinking from my own experience, you know, I take the lead from what people say on online reviews or from social media, or friends and family.

So, in terms of payment methods I, I think of like Apple Pay and how I was definitely skeptical, like it doesn’t feel safe versus just tapping my credit card. But now I, I hardly take my, my wallet out of the house when I, when I know I’m just going down the road to the, to the grocery store. So certainly, feel that one.

Steve: I mean exactly. You know, social proof can push consumers towards decisions that they might not have made otherwise especially when combined with urgency, and exclusivity.

And again, social media plays a huge role here with platforms like Instagram, TikTok, YouTube, you know, really amplifying trends and influencing those decisions in real time. You know, a product going viral is, it’s so common. You see it like literally once a week it feels like.

But a product going viral on social media because the celebrity was using it. You know, it can really drive a huge demand, literally, overnight, within a matter of hours even. You know, because people are see that and want to get in on that action as well. And you know, ultimately, it’s, it’s the influence of the people that we see value in or we see taking actions on various products that they drive that impulsive spending behavior.

Max: No, a hundred percent and outside of that just social proof, it feels like there’s this other influence that’s playing on us and that is kind of this, this price of luxury. And like the kind of the feeling that you get when you kind of get to, when you’re able to spend on, on luxury.

Can you kind of talk, talk about how that plays into the psychology of consumer decision making?

Steve: Yeah, absolutely. Social comparison and status spending is a major influence. Consumers don’t just buy products, they buy status, they buy a lifestyle and luxury brands thrive on this.

That’s a concept that applies to, to various spending behaviors. It’s not just you know, retail stores and. The Gucci, the Louie, that kind of thing. There’s, there’s influence and luxury in all aspects.

Max: Yeah in that regard, I think of grocery store spending, just to my earlier point, you know, when you have the decision of going down to Whole Foods versus going to an Aldi or a smaller shop.

Being able to walk out of that Whole Foods bag resonates. You know, with that, that kind whole idea that you just said of like, I like to have that Whole Food Bag and tell people that, hey, I can afford to, to pay at Whole Foods which, you know, easily is maybe 20% more expensive on the same goods I might be buying at, at the discount store down the street.

So like, tell me a bit more about you know, this kind of signal status that we play maybe inherently with these decisions, and you know, how does that come into play?

Steve: Yeah, I mean, you know, look at your friend groups, right? Like friend groups is a, a huge aspect. It’s not just the celebrities, but you know, the people around you influence those decisions as well.

Steve: And so using the Whole Foods example, because it’s relevant. Like if your friends are shopping at Whole Foods, there’s a higher chance that you’re going to end up shopping at Whole Foods as well and, and wanting to feel on the same level as the people that you’re closest with, you know?

Max: Yeah, it’s something to take into consideration for businesses as it pertains to the payment methods that they’re using. Let’s step away from the Whole Foods example and just kind of talk about a generic grocery store.

You’re owning a small grocery store in a medium sized city, what do you have to kind of consider in terms of what, what payment methods you’re paying with and how do consumers think about what credit card or debit card or rewards program they’re going to use to, to pay with what’s, what’s going on there?

Steve: Yeah. You know, again, it goes back to status and I think essentially self-inflation, right? But people are more likely to use a premium credit card, you know, think an American Express Platinum where you know the metal card and you drop it on the table and, and you feel, flashy and fancy. And hopefully, you know, most people are using those cards effectively, but it is a status symbol, right?

I can even say in, in my friend groups, it’s something we talk about talk and we make jokes about, but the jokes tend to be relevant to the trends in the world. And your friend groups, your social settings influence the act of paying with a premium card is reinforcing the perception of wealth and exclusivity.

Max: Yeah, I think definitely there’s a message there that if you are a small business, in order to like, align yourself with a, you know, the trends in consumer psychology and this kind of social comparison game that we all play you have to make sure that you’re offering the ability to pay with premium credit cards, the ability to pay with, you know, a cash or buy now pay later.

We’re going to see these trends pick up as new generations come up and take on different types of payments. Purchasing uses, right?

It’ll be interesting to see how that evolves. For example, I actually just started using Cash App or Venmo and Cash app and the peer-to-peer payment styles a bit more around San Francisco, just because I’ll get better deals on certain items than if I pay with my credit card.

Max: So similar to how you see kind of cash and, and card prices in a dual pricing system you start to see a Venmo price and a card price. So definitely like an interesting element there.

Something you kind of touched on was this kind of fear of missing out, right?

Max: Like you, you want to be able to like to do the impulse buying, you want to be able to like, you know, spend on what you want to spend, you know? Tell me a little bit more about what a business has to kind of keep in mind as it pertains to tapping into that feeling that consumers have around FOMO.

Steve: Yeah, I mean, it’s strategies that have got me in the past, because it’s been used by marketers and sales for years. With limited time offers, flash sales, scarcity tactics all really applies to the fear of missing out. And, you know, think like on somebody’s website when they’re running low on stock, you can see maybe two left in stock.

It all triggers an impulse spending behavior. And when consumers think that they might miss out on that deal, they’re more likely to act quickly. And so that that urgency created by FOMO can make people spend impulsively. And it’s oftentimes without really considering if they actually need the product or not, you know, it’s an emotional response.

Max: Yeah. And, and to that emotional response, what are some of the payment technologies that you’re seeing that have appeared to kind of, you know, basically align themselves, align with that, that trend?

Steve: Yeah, we, we talked about this a little bit in the last episode and if you haven’t listened, go check it out. But buy now, pay later is a big one for this. It reinforces that impulse decision because it makes it a lot easier for a consumer to go to a website, maybe they saw it was running low on stock, and they can spread out their payments over four weeks or longer than that if they need to.

But that’s really a great example of, you know, how to capitalize on the psychological spending habits. It just spreads out that payment and again, it’s ultimately making it easier for somebody to complete that impulse spend.

Max: Yeah. Yeah, that’s a great point. You know, let’s, let’s go to one other influence, you know, look, I think that’s a great turn turning point in the conversation. You know, we’ve just spoken for about 10 minutes about like, how are we as humans. You know, how we’re making these decisions from a psychological and emotional level.

It seems like this episode’s kind of going in the direction of saying, hey, there’s all these things that like make us want to buy more. That’s like kind of happened throughout history, like wherever we’ve gone, humans are humans regardless of if it was hundreds of years ago, or if it was yesterday.

But one thing that to me seems much different today than it was when maybe our parents were our age is social media and the influence that social media has had on buying decisions. And that’s not just online, but you know, the, the conscious or subconscious decisions that we’re making in person as well.

It feels hard to miss, so, tell me a little bit about how the influence of TikTok or Instagram or YouTube has changed how we have purchased?

Steve: Yeah, I mean, you, you can never forget social media, especially in this day and age with product discovery. It’s made it so easy to see new products.

It’s really embedded in our daily content consumption and so you know, whether it’s influencer endorsements, the “TikTok Made Me Buy It Trend”, if you’ve seen that, live shopping events, which is really fascinating to me.

Social platforms are really driving enormous amounts of consumer spending at the end of the day.

Max: Yeah, it feels like one viral video or influencer recommendation can really lead to a product selling out overnight. And I’m not one to say, like I’ve gone on a social media cleanse over the, the last few months, but I still feel the gravitational pull to at least kind of shop, eat, and consume in a certain way. I think it’s been now integrated over many, many years of how somebody my age should.

What I should eat, where I should vacation, where I should live. And you know, it is crazy how to, to your, to our point earlier, like how that trickles down, not just to like what I’m purchasing, but what I’m purchasing with. And what I look out for in terms of like the dynamics of a store.

Steve: Yeah, and it’s interesting because I don’t think, you know, people are necessarily going to Instagram or TikTok to actually shop. And so, I feel like a lot of times it’s a subconscious thing where you don’t know until you see it and then you see it and have to pull the trigger.

But yeah, social, like I said, it’s, it’s really driven the discovery of new products, yoy know, they’re also doing things with different payment technologies and we can’t forget how far payment integration has evolved. And so now social media platforms are now embedding payment solutions directly into the ecosystem, making it even easier.

You know, they don’t even have to leave the app again. You know, think TikTok Shop and Instagram kind of has their own version of it as well. They have made it really easy to buy products by just embedding it right into the platform.

Max: One hundreds percent Steve, that’s like a whole new episode of conversation to talk about. How merchants and maybe ISOs or ISVs evolve their offerings online.

I have a feeling that in the in the next 5 to 10 years, we’re going to see every merchant everywhere have an online presence somehow and adopt faster online rails for developing their storefront. But that’s a different episode.

Max: So let’s, let’s zoom out just a bit more and talk about the implications of these kind of spending norms and kind of what are the global implications for payments. Social influence isn’t just about what’s, you know, trending. It’s also deeply tied to culture. What happens in the US might, might be a trend and might, you know, influence the rest of the world.

But you know, you go to the UK, you go to the Europe, they act very differently. Take an example here, like we in the US spend much, much more on par with our credit cards versus the UK and EU, which is still predominantly a debit card or direct debit kind of culture. Tell me a little bit about the marketing and consumer level decision making framework, what are some of those trends shaping behavior?

Steve: Yeah. Culture is a big one. And it’s not just, you know, from country to country, it’s even within the US now. Within the US the differences are maybe a little less drastic in terms of the differences between the US and the UK but in some countries cash is still king.

Again, relating to what I just said, there are, are likely still some areas in the US that favor cash. So, while other, other countries and cities have, you know, fully embraced digital wallets and collectivist cultures spending is often influenced by family obligations.

While in individualistic cultures it’s a lot more about self-expression. And that again ties back to all the things that we just said above, especially in the US.

You see a lot of these influential spending habits based on friends, celebrities and status and the difference with culture is something you, you really do have to consider even within the United States, but especially when you’re thinking on a global scale as well.

Max: Yeah, I guess the takeaway is somewhat that, like for merchants, for software providers, you know, expanding into new markets, whether it be like Canada and Mexico or across the pond. You’re talking about adjusting to local spending behaviors and how your payment technology intersects with those behaviors is crucial.

Steve: Yeah, yeah, exactly. Adapting to culture preferences can enhance that customer trust and it’s going to drive more conversions.

It’s not just culturally too, right? Like all the things that we just mentioned, you have to think about the product that you sell, what type of brand you want to portray, who your customers are, and how they spend money.

Max: Yeah. And look again, we could go on and on, this is a whole podcast episode all on its own.

We’ll, we’ll save that for another time, but we’ll, we’ll bring some product people on because it might be better than just having the marketing and the finance guy in the room.

So Steve, let’s wrap it up. And let’s tie it back to payments.

It seems like there’s a lot of interconnectedness in terms of all these points we made. Do you mind just giving us a brief takeaway of what we spoke about today?

Steve: Yeah, I would say the biggest takeaway is consumer spending in 2025 especially, and we’ve seen the lead up to this and it’s only going to continue, but it’s deeply social.

Whether it’s social proof, status spending, FOMO driven urgency, social media influence or cultural norms. Businesses really need to take into consideration their payment strategies and tailor it to those influencing factors. That means optimizing your checkout experiences using behavioral insights and data to drive engagement and ensure that your payment options align with the consumer expectations.

Max: A hundred percent. You know, it’s clear when businesses understand these social influences and those are usually the businesses that convert customers and keep people loyal to their brand. So, you know, I think you hit the nail on the head right there. Thanks for that.

Steve: Yeah, no, absolutely. Happy to be the, the subject matter expert in this case today.

That’s it for today’s episode of Payment Pulse. We want to know what you think about these so social influences. Is it something that you’re considering as a business owner, whether you’re a merchant or software provider?

But yeah, appreciate the time today, Max. We will see you next week!