Exploring the impact of payment method perceived value on transaction experience and willingness to pay: evidence from Innsbruck Christmas Market Open Access

Christmas markets are an integral part of Christmas holiday celebrations, serving as a significant form of organization. Over the years, they have experienced immense growth in both size and popularity (Brida and Tokarchuk, 2017) and have effectively infused a festive mood into the local area (Marcher et al., 2019). These markets host various cultural and social events contributing to residents’ well-being and confidence while attracting visitors during the off-peak season (Brida et al., 2017). Moreover, they are crucial in boosting local economic growth and generating revenue for tourism-related industries (Egresi et al., 2021).

The outbreak of the pandemic between 2020 and 2022 harmed the tourism industry. Many countries closed their Christmas markets during the pandemic to prevent the spread of the virus. Although some countries are gradually reopening their Christmas markets in 2022, they have implemented shortened opening hours and strict entry conditions such as mask-wearing, proof of vaccination, and limited capacity. These measures have not only reduced the number of visitors to the Christmas markets but have also led to the closure of many Christmas shops. Moreover, the pandemic has changed people’s travel and consumption habits. Consumers have become more concerned about hygiene and avoiding crowded places due to health risks. Additionally, the pandemic has accelerated the acceptance of technology to some extent. While cashless payments have been available for a long time, the need for safe and hygienic transactions during the pandemic has led to the widespread adoption of cashless payment methods in Europe (Kotkowski and Polasik, 2021).

With the World Health Organization declaring the end of the pandemic (WHO, 2023), the tourism and hospitality industry is gradually recovering. As a result, people’s behaviors are returning to what they were before the pandemic. For example, individuals are now more likely to dine in restaurants instead of choosing food delivery. There is also a renewed enthusiasm among people for holiday and festival celebrations and trip planning (Yu et al., 2023).

However, scholars have pointed out that certain technology-related behaviors, like cashless payments, were popularized during the pandemic and have continued to be used even after its conclusion (Kim et al., 2021; Wang and Peters, 2023). In fact, cashless payments have become an important method of payment in the tourism and hospitality industry (Wang and Peters, 2023).

Austria is a popular tourist destination for its abundant tourism resources and technological advancements. However, like other German-speaking countries, Austria heavily relies on cash payments (Schautzer and Stix, 2022), which can be inconvenient and impact the satisfaction and experience of international tourists who are used to and prefer cashless payments. With the end of the pandemic, Austria has announced the resumption of Christmas Markets in 2023. While the size and format of the Austrian Christmas Markets remain unchanged, one noticeable difference is that Christmas Market stores, which previously only accepted cash payments, now commonly offer both cash and cashless payment options. It is unclear whether the adoption of cashless payments in Christmas markets is driven by consumers' ongoing concerns about the health risks associated with cash and their preference for convenient payment methods. Additionally, it is unknown how the use of cashless payment methods affects consumers' transaction experience at Christmas markets and how a convenient transaction experience influences consumers' willingness to spend at these markets.

Therefore, to address the research gaps, this study was conducted in the Christmas Markets of Tyrol, a western state in Austria. Tyrol is strategically situated, with borders to Germany in the north and Italy in the south, and it connects to Liechtenstein and Switzerland in the west. Each winter, a considerable number of tourists visit Tyrol to ski and explore the Christmas markets. Additionally, a significant influx of transit passengers makes a brief stop at the Christmas markets. Therefore, Tyrol is well-suited to be the subject of this study.

Christmas markets in Europe are street markets that feature fixed stalls. They typically begin a month before Christmas and close at noon on Christmas Eve. Some Christmas markets stay open until the day after New Year’s Eve, allowing people to enjoy the market during the Christmas and New Year holidays. Visiting a Christmas market has become a European tradition (Brida et al., 2017). The stalls at these markets offer a wide range of products related to Christmas, including ornaments, local food and drinks, and crafts. Christmas markets are unique in that they combine shopping, dining, and entertainment. They provide both locals and tourists with a festive atmosphere, including performances and music (Brida et al., 2017).

Existing research on Christmas markets is divided into studies on the authenticity of the Christmas events experience (Brida et al., 2017; Castéran and Roederer, 2013; Gibson, 2019; Marcher et al., 2019) and how Christmas markets promote consumer spending and increase the local merchant revenue (Brida et al., 2013b; Brida and Tokarchuk, 2015, 2017). Moreover, scholars have also explored the impact of Christmas markets on residents and businesses (Egresi et al., 2021). Christmas markets offer a cultural experiential landscape that provides an authentic experience of fun, enjoyment, and entertainment. They also serve as gathering places for various groups, including locals and tourists, to interact and engage with each other (Broeckerhoff and Galalae, 2022). Cultural performances, sampling traditional foods, and purchasing traditional crafts at Christmas markets enhance the consumer experience (Parker et al., 2024; Trandberg Jensen and Fusté-Forné, 2023).

The festive atmosphere and unique experience of Christmas markets also influence consumer shopping behavior. Brida et al. (2013a) point out that products imbued with a sense of authenticity in the Christmas market increase consumer spending and willingness to buy. Tourists' consumption behaviors while traveling differ from their daily consumption behaviors at home (Correia and Kozak, 2016). During travel, tourists tend to spend more on shopping than they do in their daily lives. This is because tourists typically purchase more non-essential items and spend more time enjoying the shopping experience (Brida and Tokarchuk, 2017). Consumers are psychologically prepared to overspend during specific times and occasions, such as Christmas markets (Brida and Tokarchuk, 2015). Additionally, tourists' experiences and shopping behaviors are influenced by factors such as the presence of other shoppers, time constraints, and communication with merchants (Yu and Littrell, 2005).

The widespread adoption of cashless payments has been influenced by rapid advances in technology, previous pandemics, and policy advocacy (Wang and Peters, 2023). Cashless payment methods can generally be classified into three types based on their carrier form: mobile payment, card-based payment, and bio-information-based payment (Alkhowaiter, 2020). Mobile payments involve transactions facilitated by banks or third-party financial institutions using mobile communication devices like smartphones and smartwatches as carriers (Bezovski, 2016). Card-based cashless payments primarily utilize bank debit and credit cards equipped with Near Field Communication (NFC) functionality. Currently, cashless payments based on bio-information include iris scanning, facial recognition, and fingerprint payments (Sulaiman and Almunawar, 2022). Additionally, cashless payments can be categorized by the method of currency issuance. These categories include centralized currencies issued by governments, such as fiat currencies in electronic form and Central Bank Digital Currencies (CBDCs) (Agur et al., 2022), as well as decentralized cryptocurrencies (Soomro et al., 2022).

Scholars have extensively researched cashless payments, focusing on factors such as personal innovation, social influence, perceived convenience, and propensity to transact that impact consumers' intention to use these payment methods (Wang and Peters, 2023). Furthermore, consumers' emotions significantly influence their willingness to adopt cashless payments (Karimi and Liu, 2020). In practical terms, technical barriers to cashless payment methods make consumers feel embarrassed and dissatisfied with their transactions (Liu and Mattila, 2019). Additionally, functional and psychological barriers contribute to the delay in consumers' adoption of mobile payments (Khanra et al., 2021). While consumers show a preference for cashless and mobile payments due to increased trust in their mobile devices, they are more resistant to biometric-based payments (Lee and Pan, 2023) because of concerns about the security and trustworthiness of their personal data (Mróz-Gorgoń et al., 2022). In contrast, cryptocurrencies are viewed as more secure and trustworthy, with their encrypted attributes allowing for secure storage and convenient transactions. This is particularly beneficial in sectors like medical tourism, where secure and transparent transactions enable easy completion and create a record of potential medical malpractice (Çapar, 2021).

In the context of cultural and music festivals, NFC and Radio Frequency Identification (RFID)-based wristband systems not only allow consumers to pre-deposit amounts and view balances in real time but also increase participation in festival events, as well as serve as digital tickets (Rhee, 2022). It offers participants efficient and convenient methods to replace cash and reduce the risk of loss and theft of consumer cash or wallets. However, NFC and RFID-based wristbands are primarily utilized in relatively closed facilities such as hotels (Ozturk et al., 2012), theme parks (Tsai et al., 2017), or cultural festivals (Rhee, 2022), and event organizers need to collect the wristbands after the event. Additionally, the uniform cashless payment method used by event organizers makes all participants heavily reliant on a specific cashless payment system. This can create issues for participants in the event of payment errors or malfunctions (Sun et al., 2021). Therefore, an open Christmas market using NFC and RFID-based wristband payment methods that are unsuitable.

Willingness to pay (WTP) is defined as “the maximum amount a consumer is willing to spend for a product or service” (Dwivedi et al., 2018). It is influenced by factors such as consumer brand experience (Dwivedi et al., 2018), loyalty (Garcia-Madariaga et al., 2022), and consumer behavior intention (Durgun and Davras, 2024; Selem et al., 2023). Prior research has explored the impact of payment method convenience on consumers' willingness to pay. Dahlberg et al. (2015) identified convenience as a factor that could potentially influence consumers' willingness to pay through mobile payments. Tan and Ooi (2018) noted that mobile devices, including mobile payments, can increase mobile shopping behavior among tourists and have a positive effect on overall perceptions of product prices in stores and willingness to pay (Falk et al., 2016). By comparing credit card and mobile payments, Boden et al. (2020) confirm that convenience mediates the payment forms and willingness to pay. They also affirm that convenience is an important factor driving the rise in willingness to pay. While scholars have conducted extensive research on the factors influencing tourists' experiences and shopping at Christmas markets, only a few articles have examined the impact of payment method perception on tourists' payment experience, and limited studies investigate whether payment methods influence consumer willingness to pay more at festival markets. It is also unclear why tourists choose cashless payments and what kind of impact cashless payments have on tourists' transaction process.

Existing studies lack a uniform definition of the perceived inefficiency of cash. Lu and Wung (2021) define the need to carry, count, and provide change when using cash as the perceived trouble of cash. They note that cash’s inability to record and ensure transaction transparency, as well as its limitation in facilitating large payments contribute to negative perceptions among consumers. Perceived inefficiency refers to “the negative experience individuals have with traditional content used in the workplace, such as insufficient content and wasted time.” (Kim et al., 2019). Inefficiencies are often perceived when individuals feel the time and monetary costs invested do not yield the desired results (Heinonen, 2004). In the context of the inconvenience associated with cash payments at the Christmas market, this study adopts the concept provided by Wang and Peters (2023, p. 6), which states that it refers to “consumers' negative perceptions of payment methods due to the time and effort required to calculate bills and make a change, resulting in a lengthy payment process.” The inconvenience of payment methods impacts the consumer’s transaction experience. Therefore, the hypothesis below is developed:

Risk perception is based on people’s concerns about the uncertainty of potential negative outcomes and their perceived inability and unwillingness to handle them (Kalinić et al., 2019). Past pandemics have increased concerns about health risks. Cash, which can carry and transmit bacteria and viruses, is a significant concern as it can be contagious and cause diseases (Chin et al., 2020). There is a growing concern that cash could spread disease and lead to increased infections (Cevik, 2020). Cash not only circulated among many individuals in public spaces, especially in areas with frequent transactions like Christmas markets but there is also a high chance that viruses and bacteria on cash surfaces could stick to food and be transmitted from the mouth to the body upon contact. As a result, consumers at Christmas markets may perceive cash as a health risk, affecting their overall transaction experience at these venues. The following hypothesis is therefore proposed:

Perceived convenience refers to how easy it is for consumers to make decisions, benefit from products or services, and complete transactions efficiently (Roy et al., 2018). As tourists' demand for convenience grows, companies are increasingly investing in convenient facilities and devices to improve the ease of purchasing (Palazzo et al., 2021). Cashless payment methods, like those that offer fast and secure transactions, also contribute to users' perception of convenience (Wang and Peters, 2023). Therefore, the following hypothesis was formulated:

Perceived security and privacy are the user’s perception of the security of technology products and devices, as well as their trust in the technology’s ability to protect personal privacy and information security (e.g. financial or biometric information) (Khanra et al., 2021; Mombeuil, 2020). Consumer awareness regarding security and privacy protection is an ongoing process (Lim et al., 2019). However, some payment methods, like cashless payments through bank cards and mobile payments, are already widely accepted and used. Previous research has shown that consumers' perception of security and privacy protections in payment methods can promote their intention to transition toward using mobile payments (Wang and Peters, 2023). Therefore, this study proposes the following hypotheses:

Offline transactions generally progress through three main stages: the evaluation of goods, the negotiation between buyer and seller, and the monetary exchange of the value of goods and services (Cheng et al., 2014). In brick-and-mortar stores, the focus of the transaction between the consumer and the merchant is on the final stage – the monetary exchange of the value of goods and services, i.e. the payment. Sun et al. (2022) believe that secure, fast, and convenient payment methods can positively influence the consumer’s retail purchasing experience. Therefore, this study argues that the convenience of payment is key to consumers’ transaction experience and defines the transaction experience as “the experience of the overall process and interaction involved in completing a financial transaction between a buyer and a seller”.

In the context of Christmas festivals, Christmas markets serve as a platform for individuals to immerse themselves in Christmas culture, purchase souvenirs, and indulge in delicious food (Brida et al., 2017). Interacting with vendors at Christmas markets allows visitors to gain a better understanding of local products and cuisine (Parker et al., 2024); it also encourages customers to engage in the transaction process directly. In addition, convenient payment methods can streamline transactions, save time, and expedite payments to increase consumers’ transaction experience (Taylor, 2016). This study focuses on the final stage of the transaction progress – the payment and argues that the consumer Christmas market transaction experience mainly comes from the payment experience. Prior study find out the payment experience significantly influences consumer willingness to pay (Boden et al., 2020). Therefore, this study proposes the following hypotheses:

In addition, research has shown that experience plays a mediating role in various contexts. For instance, NasarAmini Jeloudarlou et al. (2022) found that customer experience is a mediator between servicescape and customer engagement value. Iqbal et al. (2023) also demonstrated the mediating effect of consumer experience between authenticity and revisiting intent. Furthermore, experience has been found to mediate the relationship between employee-tourist encounter characteristics and tourists' intentions to recommend (Barnes et al., 2020). Additionally, the perceived value of payment methods in the Christmas market can influence the transaction experience of consumers and tourists, which in turn may impact their willingness to pay. We propose the following hypotheses:

Figure 1 shows the research model for this study.

The data for this study were collected during the opening of the Christmas market in Innsbruck, the capital of the Austrian state of Tyrol. Tyrol is considered one of the federal states in Austria with a well-developed tourism industry. As the capital of Tyrol, Innsbruck boasts excellent natural and cultural resources. It attracts numerous hiking and mountaineering enthusiasts in summer and fall and serves as a ski resort in winter and spring. The Innsbruck Christmas Market begins in mid-to-late November and extends until the end of the New Year’s holiday season. In addition to skiing enthusiasts, many international tourists visit and enjoy the Christmas Market (Plate 1).

To investigate the impact of cashless payments on consumers' transaction experience and willingness to pay at the Innsbruck Christmas market, this study employs a quantitative research method: the questionnaire. Before distributing the official questionnaire, a pilot survey was conducted with a snowball sample of 50 respondents to assess the clarity of the survey questions. As Cronbach’s alpha for each construct exceeded 0.80, no modifications to the questionnaire measurements were necessary. Since this study acknowledges the valuable time tourists dedicate to visiting the Innsbruck Christmas market, some tourists opted to participate in online questionnaires (SurveySwap and SurveyCircle) following their visit, and in on-site questionnaires. Therefore, by combining the convent sampling strategy, the self-selecting sampling strategy was also adopted in this study. SurveySwap and SurveyCircle are widely used online questionnaire platforms that enable the collection of respondents according to the researcher’s needs, including by region. For this study, separate settings were established for different groups of respondents: German-speaking respondents (limited to Germany, Austria, and Switzerland), respondents from European countries outside the German-speaking area, and respondents from non-European countries. Additionally, the online questionnaire included a screening question to ensure that only tourists who visited the Innsbruck Christmas market in 2023 could participate. The questionnaire is available in both English and German. Furthermore, briefly explained the study’s purpose, including the data protection policy, and informed each participant that completing the survey would take approximately 8–10 min. To express our gratitude, we offered participants the opportunity to enter a raffle for five Amazon vouchers worth €5 each. The questionnaire collection period for this study spanned from November 25, 2023, to January 31, 2024.

The seven constructs of this study were altered and modified from existing research (see Table 1). Three items in perceived inefficient of cash construct are adapted from Lu and Wung (2021), the perceived health risk of cash adapts three items from Wang and Peters (2023), three items of perceived convenience of cashless payment are adapted from Handarkho and Harjoseputro (2020) and one item from Wang and Peters (2023), and the perceived security and privacy of cashless payment adapts four items from Chen et al. (2020). The construct of transaction experience adapts four items from Bagdare and Jain (2013), two items of willingness to pay are adapted from Durgun and Darvas (2024), and one item from Diallo et al. (2021). All variables in this study were measured using a seven-point Likert scale ranging from 1 (strongly disagree) to 7 (strongly agree). The survey also collects demographic information.

This study accepts Bentler and Chou’s (1987) suggested minimum of 200 sample size, estimated by using the ratio of sample size to free parameters of 5:1 to 10:1, ensuring each question is answered by no less than ten respondents. A total of 420 responses were collected for this survey. Before analysis, researchers checked for missing data by variable and confirmed they were missing randomly. Fifty-six questionnaires were incomplete and not submitted. We first removed responses where the dependent variable contained missing data (17 respondents), then used mean replacement for the independent variables with less than 5% missing values and eliminated responses containing more than 5% missing values. Ultimately, a total of 347 samples were used for further analysis.

Table 2 presents the demographic information of the participants in the questionnaire. The gender distribution is relatively balanced, with males accounting for 48.2% and females for 51.8%. In terms of age, most respondents fall within the 18–25 age range (40.6%), followed by 26–35-year-olds (25.6%) and those over 35 years old (31.8%). The respondents come from various countries, primarily European countries such as Austria (10.6%), Germany (19.9%), Italy (13%), Spain (6%), and the United Kingdom (6.9%). Additionally, 12.4% of the respondents are from the USA, 8.9% from China, and 4.3% from India. More than half of the respondents hold a bachelor’s degree or higher. When it comes to payment methods at Christmas markets, 54.7% of respondents use cash, while non-cash options such as debit cards (56.7%), credit cards (36.9%), and mobile payments (24.4%) are also widely utilized.

Common method variance may affect the empirical results of this study, as it was investigated through self-reports and cross-sectional surveys (Podsakoff et al., 2003). Therefore, to assess the potential presence of CMV, Harman’s one-factor test was conducted using IBM SPSS Statistics (Version 25) software. The test results indicate that the first factor accounted for 31.87% of the total variance explained. Since this value is below 50% of the total variance, it can be concluded that CMV is not a concern in this study.

This study utilized SmartPLS (version 3.2.9) and employed partial least squares structural equation modeling (PLS-SEM) to evaluate measurement and structural models. Before testing the structural model, the researcher first assessed the reliability and validity of the measurement model. This study follows Hair et al. (2021) suggestion that constructs should have a Cronbach’s Alpha and Composite Reliability (CR) greater than 0.7 to confirm reliability, and an Average Variance Extracted (AVE) greater than 0.5 to confirm good validity. Table 3 shows that each model construct exceeded the recommended values and met the requirements for validity and reliability. Next, the discriminant validity of each construct was examined using the Heterotrait-Monotrait (HTMT) ratio of correlations. Table 4 shows that all HTMT values were below 0.85 (Henseler et al., 2015), confirming the discriminant validity of all constructs.

The inner variance inflation factors (VIF) of all constructs were below 5 (Hair et al., 2021) (ranging from 1.056 to 1.950), indicating that there is no multicollinearity problem in this study. The standardized root means square (SRMR) value of 0.053 indicates a good model fit for the structural model, as it is below 0.08 (Hu and Bentler, 1998). Table 5 and Figure 2 present the path coefficients, t-values, and p-values of the structural model. All hypothesized regressions were conducted using a 5,000 resamples bootstrapping approach.

The results show that PI (β = 0.204, p < 0.001), PHR (β = 0.085, p < 0.05), PC (β = 0.205, p < 0.001), PSP (β = 0.338, p < 0.001) significantly influence TE; TE (β = 0.220, p < 0.001) significantly influences WTP. Thus, the effect of direct relations, namely H1, H2, H3, H4, and H5 are accepted. Meanwhile, TE significantly mediates the relation between PI and WTP ((β = 0.045, p < 0.05), the relation between PC and WTP (β = 0.065, p < 0.01), and the relation between PSP and WTP ((β = 0.074, p < 0.001), however, TE has no mediate effect on the relation between PHR and WTP (β = 0.019, p = 0.071). Therefore, H6, H8, and H9 are also accepted, and H7 is rejected. Moreover, the value of R² of transaction experience is 0.493 and willingness to pay is 0.049. Finally, the blindfolding procedure to obtain the Q². Table 6 shows that the Q² value for TR and WTP greater than 0, which means the model has sufficient predictive power (Fornell and Cha, 1994).

This study aims to explore the relationship between payment methods and consumer transaction experience at the Christmas market, as well as how transaction experience impacts consumer willingness to pay. This study examines four factors related to payment method perception and their influence on consumer transaction experience. Additionally, we assess the influence of transaction experience on consumer willingness to pay. Furthermore, we examine the mediation effect of payment experience on payment perception and willingness to pay. The overall findings of this study can be summarized as follows.

Firstly, the Christmas market is bustling with consumers, with crowds shopping and waiting to pay at both the food and souvenir stalls. When consumers use larger denomination cash payments, they may face challenges when receiving change from the vendor. Not only do consumers often receive a large number of heavy coins, which can be inconvenient to carry, but they may also find it difficult to retrieve dropped change and experience delays if the vendor does not have sufficient change available. Therefore, the inconvenience of carrying cash affects the consumer’s transaction experience, which supports previous research that shows that when consumers perceive cash as inconvenient, they are more likely to switch to a more convenient payment method (Lu and Wung, 2021; Purwandari et al., 2022).

Secondly, although the pandemic has been declared over, the psychological impact of the epidemic persists. With a significant increase in the number of people infected with the virus in Austria over the Christmas period, concerns about the health risks associated with cash are heightened (Purwandari et al., 2022; Wang and Peters, 2023). This is particularly concerning as street food chefs continue to handle cash while preparing food, which affects the transaction experience at Christmas markets. Additionally, people’s experience at the Christmas market is primarily centered around tasting food, purchasing local specialties, and participating in local events (Gibson, 2019; Marcher et al., 2019). Convenient payment methods can improve consumer consumption and shopping experience (Eren, 2024; Sun et al., 2022). This is mainly because convenient payment methods save consumers from the tediousness of payment, improve efficiency, and increase the transaction experience, allowing consumers to focus on enjoying their shopping.

Furthermore, the significant impact of perceived privacy and security of cashless payments on the transaction experience may stem from consumers' trust in the cashless payment methods they regularly use. For example, Asian tourists, such as Chinese and Indian tourists, are accustomed to mobile payments. In contrast, European and American tourists are more inclined to utilize NFC-enabled bank debit or credit cards. Consumers trust the payment methods they are accustomed to using to protect their privacy, and the security of their transactions (Lim et al., 2019; Widyanto et al., 2022), and this perception enhances and influences their transaction experience at the Christmas market. Consistent with the findings of previous studies, consumers’ experiences can influence their willingness to pay (Dwivedi et al., 2018; Hao et al., 2023). The results show that the Christmas market experience can influence consumers' willingness to pay at Christmas markets. This is mainly because an efficient and convenient transaction experience at a crowded Christmas market saves time, reduces anxiety, and prevents consumers from hesitating to spend money due to perceived complexities in payment and difficulties in receiving change.

Finally, this study investigates the mediating role of transaction experience. Specifically, it examines how consumers' perceived value of payment methods influences their willingness to pay through transaction experience. Consumers' perceptions of payment method efficiency, convenience, privacy, and security can enhance their willingness to pay during actual transactions in the Christmas market. In essence, consumers are inclined to pay more for payment methods that offer security, efficiency, and privacy protection based on their transaction experiences.

The theoretical contribution of this study is reflected in three main points. Firstly, this study adds to the theory of perceived value (Sánchez-Fernández and Iniesta-Bonillo, 2007). While previous research has explored the impact of perceived value factors on attitudes and behavioral intention to use payment methods, there has been a lack of exploration regarding the actual use of different payment methods in festival and event settings. This study validates the significance of payment methods for the transaction experience when they are actually used in the context of a Christmas market in a tourist destination. Second, this study examines the important role of the transaction experience in Christmas market shopping and consumption. A convenient, safe, and efficient transaction experience not only influences consumers' willingness to pay at Christmas markets, but also acts as a mediator between consumer payment perception and willingness to pay. In addition, scholars hold varying views on the effect that payment methods have on increasing consumers' willingness to pay. For example, while the prior studies verify that card and mobile payments significantly increase consumers' willingness to pay (Boden et al., 2020; Runnemark et al., 2015), Liu and Dewitte (2021) argue in a subsequent replication study that the effect is overstated. A recent study confirms that, compared to paying with cash, consumers are more willing to pay at a premium with a card (Otterbring et al., 2023). Thus, this study further corroborates the effect of cashless payments (card and mobile payments) on consumers' willingness to pay more. Lastly, this study fills the gap in payment methods in Christmas market research and emphasizes the importance of payment methods in holiday research.

Aside from its theoretical contributions, this study also provides managerial implications. Firstly, this study emphasizes the important role of payment methods in destination festivals and events and recommends that destination management organizations adopt cashless payment systems. Destination festivals and events not only increase brand awareness but also attract tourists to local restaurants and hotels (Marcher et al., 2019). Tourists contribute to the destination’s economy through increased spending while participating in the festivities (Egresi et al., 2021). Convenient payment methods and a positive transaction experience can reduce consumers' concerns about inconvenience in the payment process (Tangit and Law, 2021), allowing them to focus more on the entertainment, food, and souvenir experiences of the event. It further combined with other aspects of the consumer experience, can not only deepen destination brand perception and loyalty but also increase consumers' willingness to pay a premium for products and services.

Secondly, this study offers practical recommendations for vendors and retailers. Retailers and vendors have been slow to adopt cashless payments due to cost barriers (Lundberg et al., 2014) and a lack of awareness regarding the necessity of establishing a cashless payment system (Mallat and Tuunainen, 2008). With the gradual popularization of cashless payment methods, consumers who have already adopted cashless payment methods will likely exhibit a higher willingness to pay due to their ingrained cashless payment habits and preference for convenient payment options (Boden et al., 2020). In the context of a Christmas market, stalls equipped with cashless payment methods can be set up at a reasonable premium (e.g. covering the setup costs of cashless payment methods), thereby attracting consumers who prefer convenient payment options. Therefore, implementing cashless payment methods not only increases store revenues but also offsets the costs associated with setting up payment methods.

Finally, this study provides recommendations for resuming Christmas markets in Austria after the pandemic. It suggests that Christmas market participants destination organizations, stores, and tourists should continue paying close attention to health risks. Even though the pandemic has been declared over, implementing safe and hygienic payment methods remains crucial to safeguard people’s health and prevent the closure of Christmas markets again.

Despite the notable contributions, there are some limitations to this study. Firstly, this study only focuses on the Innsbruck Christmas market, which may not fully represent all Austrian Christmas markets. Future studies should consider including Christmas markets in other tourist cities, such as Salzburg and Vienna, to broaden and validate the results. Secondly, the study does not differentiate between residents and tourists when comparing groups. Since residents and tourists may have different payment method preferences, this could potentially impact their transaction experience and willingness to pay. Therefore, future researchers should identify and distinguish between consumers (i.e. residents and tourists) at the Christmas market and compare specific cashless payment methods accordingly. Finally, this study focuses solely on card and mobile payments at the Christmas market, future research should explore a broader range of cashless payment methods.