In a world of digital money, what’s the right etiquette to split the bill with friends?

We’ve all been there – splitting a bill at dinner, covering a mate’s coffee, or sending a quick transfer for concert tickets. It’s part of modern social life. As money becomes increasingly digital and instantaneous, we no longer need to worry about doing maths in our heads or fussing about changing notes and coins.

Now, we’ve got an app for that. Yet the way we exchange money is changing more than just our bank balances. It’s reshaping trust, communication, and even the dynamics of friendship.

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We often don’t think about it, but money does have an emotional weight. We experience what psychologists call the pain of payment, a negative emotional response to parting with money. It’s not just large amounts of money that feel uncomfortable or stressful – paying always carries some negative feeling.

So, the next time it comes to splitting the bill, what’s the best way to approach it? Just because we can ask for money with an app doesn’t mean it’s good for our friendships – sometimes there are better ways to go about it.

Money is the last taboo

Money is also one of those slightly taboo subjects, like religion or politics. When money comes up, we often prefer to change the subject, even with our partners.

While “I’ll get you next time” might seem harmless, new payment technologies like PayID, Tap and Go, and instant transfers mean there’s less excuse for delay, and more potential for tension when people don’t pay up. A quick transfer request can feel efficient and convenient to one person, but uncomfortable and impersonal to another.

When we ask for payment, we alter the social dynamic. A whole mix of psychological reactions and insecurities comes into play.

These reactions can also damage the image we want to project to others. If we see ourselves as generous and caring, we might not be comfortable asking for payment for that coffee.

Casual IOUs between friends often exist in a grey area – too small to make a fuss about, but significant enough to stick in our minds.

When we don’t mind shouting

Taking turns to pay when going out to dinner or coffee is more likely to make us happier, as we don’t mind paying for those closest to us. Spending money on experiences with others actually increases our happiness, making us feel good to give them a little treat or gift.

However, for someone we’re not close with, not splitting the bill can cause issues.

Reciprocity, the expectation of getting something in return, can be encoded as a type of debt. Being paid for, then having a social debt, can feel unpleasant. On the flip side, some people will feel they have been unfairly taken advantage of when there isn’t reciprocity.

The fear of judgement can sometimes stop people being honest about financial struggles, even with a close friend. A recent survey revealed that one-third of people lied about being in a better financial situation than they really were to protect their social status.

The same survey found this can impact relationships, with one-third of people admitting they had ended a relationship over money. Moreover, nearly seven in ten people said they had opted out of a social gathering because they were concerned it was too expensive. Of those, four in ten did not tell the real reason why.

There can be a social cost

The social etiquette around money has struggled to keep pace with technology.

It can seem quite abrupt to message a close friend via an app like Beem (the Australian equivalent of Venmo) or even text to ask to be paid back.

PayID has allowed us to send money to registered mobile numbers since 2018, doing away with the barriers of swapping BSB and account numbers.

Although it’s quicker and easier than ever to transfer money, it’s the social barrier, not the admin barrier, that is really holding us back.

How to approach the bill

Ultimately, how we manage these exchanges, whether by politely reminding a friend or quietly letting it go, can reveal a lot about our social comfort zones. The closer the friendship, the more likely we are to ask in person, or just let it go.

It can help to briefly mention money upfront, for instance, “Do you mind if we split this?”. This is socially easier than a discussion after someone has paid or as you both go to pay. It feels natural to pay half the bill at a restaurant, but can feel uncomfortable to either hand over cash later or transfer money to a friend.

If we think of these exchanges as an investment, rather than a debt, we feel better about them.

So, the next time you’re anxious about asking to be paid back, think of it as an investment in a friendship or connection. That’s more likely to help you enjoy the experience and your friendship too.