Study Reveals Mobile Payments Are Replacing Credit Cards as Status Symbols

A new study out of Cornell University reveals that consumers are forming social status perceptions based on the way they pay for things — and those perceptions are changing. Mobile payments are now more closely associated with higher social status than payments made with a credit card.

The findings suggest that credit card users are increasingly viewed as lower status than those who use mobile wallets, offering critical insight for product marketing and customer engagement strategies.

From flashy cars to designer clothes, status symbols are everywhere, allowing people to communicate an image of financial success to others without sharing their recent bank statements. 

Credit card use once communicated an element of sophistication. But while physical credit cards once served as a status symbol, “today’s status is marked by the absence of physical payment methods altogether,” according to a report by American Banker on the study.

We sat down with Alexander Fulmer, a Professor at the Cornell SC Johnson College of Business and the study’s author, to learn more about shifting perceptions around credit card payments and what they mean to the card industry.

Fulmer told us he was motivated to study public perceptions of payment methods after noticing how much consumer preferences have shifted over time.

“It wasn’t that long ago that people primarily carried cash,” Fulmer said. “But I’ve seen how much the payment modality landscape has changed, and how quickly it’s changed. 

“It made me wonder what the public thinks about these more traditional methods of payment like credit cards and cash, given that so many people are paying with mobile payment apps now,” he added.

Fulmer’s study explored how people perceive consumers based on their chosen payment method. He told us he analyzed reactions to identical purchases made using mobile payment apps, cash, or credit cards to understand how each method influences perception.

Fulmer said the results were not what he had anticipated.

“What I was most surprised by was the role of credit cards within the pattern of findings, because I expected credit cards to be somewhere between cash and mobile payment apps in terms of how they were perceived,” he told us. “But what I found was that they’re actually perceived virtually identically, in terms of status, as cash.”

He told us the evidence he gathered suggests that mobile payments are the strongest signal of status. 

Capital One research indicates that 57% of adults in the U.S. use digital wallets, and 4.3 billion people around the world are “digital wallet users.”

But Fulmer said that people underestimate the extent to which consumers use mobile payments, perceiving those who use mobile payment apps as early adopters of the technology.

The majority of adults in the U.S. use digital wallets.

“This misperception that mobile payment users are early adopters is making observers perceive them as more wealthy,” he told us. “And those two perceptions work together to drive this higher status that’s ascribed to mobile payments.”

Credit card issuers — especially those offering premium products — may benefit from strategies that reshape public perceptions. Fulmer suggested that aligning credit cards with emerging payment technologies could help position cardholders as early adopters of innovation.

Marketing also plays a key role in reinforcing a card’s status appeal. For instance, promoting features like biometric security may signal exclusivity and technological sophistication, enhancing the perceived prestige of card ownership.

Credit card issuers could also leverage AI to improve perceptions around card use. Fulmer said issuers could offer certain cardholders the services of AI-powered digital financial advisors to help position their products as more innovative.

One of Fulmer’s primary points, that perceptions of people as early adopters of mobile payment solutions can drive status signaling, means that mobile payment providers should enjoy their time in the sun now before it ends. You can only be an early adopter of something for so long.

New forms of transacting could emerge and leapfrog mobile payments when it comes to status signalling. Fulmer told us that people may perceive those who use AI-based financial tools and invisible payments as having a higher status than people who use mobile payment apps to purchase similar items.

Amazon Go uses advanced technologies to allow shoppers to select the items they want and pay for them without going through the traditional point-of-sale checkout process.

“Theoretically, if you witness someone coming out of a store that uses Amazon Go, you might perceive them as an early adopter to an even greater extent than if you witnessed them making a purchase with their mobile device at checkout,” Fulmer said. 

“And consequently, you might actually think that they’re even wealthier and higher status than someone using mobile,” he added.

Technologies that the general public hasn’t yet heard of could emerge to take the payments world by storm. And the payments landscape can change quickly. After all, Fulmer told us that he remembers a time when people would have to check whether a restaurant accepted credit cards.

The good news for card issuers is that they can take steps to impact how people view those who reach for a card, as opposed to cash or a mobile payment option, to make a payment.

An issuer can partner with a prominent technology firm and leverage their brand awareness to signal that people who use its card are tech-savvy or wealthy, Fulmer said.

“There is still some room for innovation in credit card design and marketing,” Fulmer told us. “And credit card issuers definitely have an opportunity to position their products such that they’re perceived more closely to the new technology of mobile payment apps than to cash.”