The mega increase of micro transactions

Tuesday, April 26, 2022 12:07 pm
Reading Time: 2 minutes

Elon Goh, from EG Financial Services, joined Mike to discuss the increase in micro transactions.Microtransactions

“Any kind of transaction that have been chopped up into smaller bits can be considered a micro transaction.” The one we are most familiar with is ‘buy now pay later’. It has grown to $29 billion with at least 30% of all transactions involving some form of buy now pay later. In the early 2000s, micro transactions were introduced in the online gaming industry.

Although these games are free to play you have to pay to win. Payment is required for extra items such as loot boxes, coins, weapons, accessories for your avatar or DLCs (downloadable content). “That’s the power of micro transactions. It’s a small amount but done over a period of time. Then you feel like it isn’t a big deal but it does add up.” For example, Elson was helping a couple organise their finances. They wanted to know if the husband’s gaming habit was more costly than the expensive shoes the wife bought. “The amount he spent was a lot more than the shoes. But shoes are visible whereas micro transaction can be small and after some time you forget about it.” So how can we avoid the temptation of micro transactions?

Elson’s tips

  1. Set up a separate savings account and transfer a small amount each pay day to grow your savings
  2. Have separate luxury account with a cap to prevent overspending
  3. Consider salary sacrificing into your super
  4.  When investing do it in small amounts

Have you spent money in online games? Let us know by texting or messaging us on socials. Listen to the full chat below!

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