Considering it’s Diwali, we want to bring you a special edition of the Finshots newsletter where we talk about some really cool things outside of run of the mill finance stuff. Also it’s been a dull few days. So there’s not a lot happening. So here’s something different.


Scratch ‘em cards

Our story today is on Google Pay. It is my go to app for making payments online. It’s almost as if the app has me hooked. The lure is too hard to resist and so I wanted to find out why. Why is the damn thing so addictive?

And it hit me. Scratch cards…

Most payment companies offer a fixed cashback on every transaction. It’s their way of hooking users to the platform. You know what to expect walking into the deal. And so every time you are rewarded for completing a routine transaction you feel elated and you are likely to go back to the platform once again, even if the rewards keep diminishing. However, Google pay doesn’t do that. It offers scratch cards if you were to complete a sizeable transaction on the platform. Unlike a fixed cashback offer, a scratch card is much like a lottery ticket. In most cases, it’s a dud i.e. the scratch card doesn’t pay out. You don’t get anything. However, in the off chance that you hit the jackpot, you get a massive payout. In my case, I once got Rs. 800 for a transaction worth Rs. 100, I made on Zomato. I was jumping for joy that day. I told everyone in the family about my lucky break. I thought that I had the Midas touch until reality set in.

If you know anything about lotteries, you know that the house always wins. No sane company will keep offering you big payouts if they want to stay in business for long. I won the jackpot, yes. But i began to realise that the probability of me winning BIG once again is now negligible. In fact, since then I’ve won a total of Rs. 20 and I’ve probably used Google Pay more than a 100 times already.

So why do I keep going back? Why is my monkey brain preferring a lottery ticket over PayTMs offer of an assured cashback? Well — Variable rewards.

Every time we receive a reward (a cashback, so to speak) our brain releases a good dose of the happy hormone — dopamine. In small moderate doses, it helps regulate our wellbeing. In large doses it can contribute to addiction. Long story short, our brains crave dopamine. So apps that help trigger the neurotransmitter get all our attention.

Back in the 1950s, BF Skinner a famed psychologist ran an experiment where he offered lab rats food pellets if they pressed a lever. Lever A would bring down pellets of the same size every time. Lever B would offer pelltes of different sizes i.e. sometimes you’d get a smaller pellet, sometimes a larger one and sometimes none at all. And the rats kept going crazy for the randomized lever. They wanted to gamble as well. This experiment provided the scientific basis for using — ‘Variable Rewards” to condition human behaviour.

It’s simple really. Our brain releases more dopamine in the anticipation of rewards than the reward itself. When the rewards are fixed and we know what to anticipate, our dopamine levels stay in check. But when the rewards are variable, our brain relentlessly seeks the thrill of unlocking large payouts-in turn hooking us to the damn thing.

It’s the same reason why gambling is so popular. It’s the same reason why FIFA (that famous football game) uses surprise player packs instead of letting users buy individual players for a fixed fee. And it’s also partly the reason why I keep going back to Google Pay in search of that elusive jackpot. It’s an addiction. I can’t stop myself. Also, ever since I won that Rs. 800 i’ve been going on and on about how Google Pay is absolutely the best. Nobody’s ever given me a cashback of 800. And almost nobody has credited it directly to my bank account.

So Google, here’s to your wonderful app — Google Pay…

Congratulations. You got me. You got me good ☺

P.S. This isnt a promotional post and Google hasn’t paid us anything to write this one. Just in case you’re wondering.


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That's all from us. See you tomorrow.