An analysis of choice architecture in payment methods of apps.
Let’s start with a simple question. What was the last meal that you had? How did you choose a dish instead of another?
If you are like me, you would have painfully scrolled through an endless list of restaurants and dishes on an app before finding the one for the day. If you were lucky, you’d have had your meal cooked by someone you love.
Every day we make thousands of choices subconsciously. Some of them are active choices but most of them are implicit defaults.
Every choice that we make is influenced by someone who has made a conscious decision to communicate the options in a certain manner. Think about it.
The individual who influences your decision in the above context is called a choice architect.
A choice architect has the responsibility for organising the environment in which people make decisions. In short, all designers are choice architects.
Every choice architect has an immense responsibility because they influence decisions made by others. They are expected to create those choices that are in the interest of the end user. Every insignificant detail can have major impact on people’s behaviour. A good rule to be able to do this job well is to assume that ‘everything matters’.
There are two schools of thoughts on how choice architects think about communicating choices to people.
One school of thought is to say that people are self-aware individuals and make the best choices in every situation and hence we lay out all the options and information in front of them and they make their own choice.
But in reality…
The other school of thought is that the choice architects choose exactly what an individual wants and put it in front of them so that they don’t have to make a choice.
But in reality…
Is there a line that we could draw between the two schools of thoughts? Richard Thaler thinks so. He suggests the idea of libertarian paternalism.
Libertarian paternalism is a relatively weak, soft, and nonintrusive type of paternalism because choices are not blocked, fenced off, or significantly burdened.
Can there be a non-intrusive way of pushing people towards certain choices that might be beneficial for the individual?
A choice architect can ‘nudge’ an individual to make a certain decision without blocking him from choosing other options. Nudge, as defined by Richard Thaler
A nudge, as we will use the term, is an aspect of the choice architecture that alters people’s behaviour in a predictable way without forbidding any options or significantly changing their economic incentives.
To count as a mere nudge, the intervention must be easy and cheap to avoid. Nudges are not mandates. Putting the fruit at eye level counts as a nudge. Banning junk food does not. If you’re curious to know more, check this video out.
To illustrate these ideas, I analysed the choice of architecture and nudges in the ‘choose payment method’ activity of some Indian apps. A payment flow opens up possibilities to analyse a wide range of examples.
A typical choose payment method screen
Swiggy’s payment method screen
Single time payments
As the name suggests, a single time payment represents any online payment where the money is paid upfront using a payment method. In recent times, the number of payment methods through which you could do an online purchase has increased. On average most of the platforms offer one or many of the following methods
I have picked 10 tech companies that provide various services and allow their users to pay through multiple payment methods. The nature of choice architecture of the ‘payment method’ activity is mapped across a spectrum that ranges from the liberal to paternal. The ones that fall in the midway offer an individual an optimal ‘nudge’ to make a decision.
Mapping the nature of choice architecture in ‘select payment method’ activities across the mobile apps
From the mapping, it’s clear that the apps that fall in the mid-range push the users toward a non-intrusive influence as opposed to others.
I could sense a pattern in the type of nudges that these apps used to influence the individuals. The nudges in these apps could be categorised into the following
Some in-depth analysis of the payment method screen and my thoughts around it.
A few more examples of a ‘choose payment option’ activity, which falls under one of the above-illustrated examples.
The next time when you design an activity which allows the users to make a choice, make sure your choice architecture provides a ‘nudge’ without being too liberal or paternal in nature.
The ideas discussed in this blog post draws inspiration from Nobel laureate Richard H. Thaler and Cass R. Sunstein work on ‘Nudge’. Follow D91 Labs for exciting insights on financial inclusion, design and technology.