Framing, Financial Literacy, and Mental Accounting: How Cashback
Labeling Affects Spending Behavior in South-Asia’s E-Wallet Economy

Dongjoo Lee

doi:10.46609/IJSSER.2025.v10i11.004

Title: Framing, Financial Literacy, and Mental Accounting: How Cashback Labeling Affects Spending Behavior in South-Asia’s E-Wallet Economy
Authors: Dongjoo Lee
Journal: International Journal of Social Science and Economic Research (IJSSER) ISSN: 2455-8834 Volume: 10 Issue: 11 Publication Date: November 2025 DOI: 10.46609/IJSSER.2025.v10i11.004
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Dongjoo Lee Jakarta Intercultural School Jakarta Indonesia
MLA 8 Lee, Dongjoo. "Framing, Financial Literacy, and Mental Accounting: How Cashback Labeling Affects Spending Behavior in South-Asia’s E-Wallet Economy." Int. j. of Social Science and Economic Research, vol. 10, no. 11, Nov. 2025, pp. 5696-5704, doi.org/10.46609/IJSSER.2025.v10i11.004. Accessed Nov. 2025. APA 6 Lee, D. (2025, November). Framing, Financial Literacy, and Mental Accounting: How Cashback Labeling Affects Spending Behavior in South-Asia’s E-Wallet Economy. Int. j. of Social Science and Economic Research, 10(11), 5696-5704. Retrieved from https://doi.org/10.46609/IJSSER.2025.v10i11.004 Chicago Lee, Dongjoo. "Framing, Financial Literacy, and Mental Accounting: How Cashback Labeling Affects Spending Behavior in South-Asia’s E-Wallet Economy." Int. j. of Social Science and Economic Research 10, no. 11 (November 2025), 5696-5704. Accessed November, 2025. https://doi.org/10.46609/IJSSER.2025.v10i11.004.
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ABSTRACT: The rapid adoption of e-wallet platforms such as GoPay, ShopeePay, and OVO has reshaped consumer spending behavior in Indonesia, particularly among younger users in urban centers like Jakarta. A key feature of these platforms is their use of cashback incentives, which, although equal in monetary value, are often presented in different ways, such as being labeled 'bonus,' 'cashback,' or 'savings.' Drawing on mental accounting theory and framing effects from behavioral economics, this study investigates how the labeling of cashback influences short-term spending decisions and whether financial literacy moderates this effect. This study investigates how the framing of cashback incentives influences consumer behavior, with a focus on mental accounting and financial literacy among e-wallet users in Indonesia and South Korea. A structured survey was administered to 50 respondents (50% male, 50% female), aged 15 to 58, with the majority residing in Jakarta (66%) and the remainder in Seoul (34%). Participants were grouped into three age categories: 15–16 years (28%), 17–18 years (32%), and 19 years and older (38%). Only six respondents reported earning income, all of whom were over 19. Notably, 67% of female students reported having a personal budget, compared to 33% of male students (p = .07). The survey explored perceptions of cashback labeled as “bonus,” “savings,” or “cashback.” When framed as a “bonus,” 74% of respondents viewed the cashback as extra money to spend freely, with younger participants (15–18 years) significantly more likely to adopt this view (p = .006). In contrast, when labeled as “savings,” 72% of respondents opted to save the cashback, with higher financial literacy scores correlating with increased saving behavior (78% vs. 50%). Age and country differences were pronounced: younger respondents and those from Indonesia were more likely to treat cashback as discretionary income, while older and South Korean participants exhibited more varied interpretations. When cashback was labeled simply as “cashback,” 70% of respondents interpreted it as a discount on their original purchase, particularly among those with higher financial literacy (75%) and Indonesian users (85%). Across all scenarios, budgeting behavior appeared to influence perceptions, with non-budgeters more likely to treat cashback as spendable money. These findings support mental accounting and framing theories, demonstrating that semantic labeling and financial literacy significantly shape consumer responses to digital financial incentives. The results offer practical implications for fintech design and financial education strategies in emerging digital economies.

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