Last month we did an experiment that involved re-designing our invoice payment reminder to nudge users towards better financial decisions. In this case: to pay their invoices on time and avoid reminder fees. We applied two nudge-oriented decision-making biases borrowed from behavioral economics: present-preference and asymmetry choice biases.

In very simplified terms, behavioral economics suggests that people are prone to decision biases that make it hard for them to make self-beneficial choices (Lee et al. 2011). It is possible to influence outcomes by using different choice presentation strategies in a manner that speaks to decision bias. This blog post recounts our experience of using these strategies to help consumers make better decisions regarding their money.

2 methods to nudge users towards better financial decisions

Behavioral economics argues against the core economic belief that we strive to make reasonable decisions. Instead, it proposes that situational factors such as our emotional states, the choice architecture or how hungry/thirsty we are heavily influences our decisions (Thaler et., al. 2013). These factors, sometimes referred to as decision bias variables, help us influence decision making.

We used two behavioral economics principles to implement the persuasive design.

1. The present-preference bias

This bias refers to our tendency to give a more significant value for imminent decisions than future ones. We overestimate the importance of the current decision compared to future ones. With invoice payment, present-preference bias harms one’s financial well-being, as the decision to pay right now don’t feel important if an option to postpone payment is available. However, we can use the present-preference bias to our advantage as noted below!

2. Asymmetrically dominated choices

The Second bias refers to people’s tendency to go for the easiest option when facing choices. We are ‘naturally lazy’ to bother with details. We are prone to choose what Huber et al. (1982) referred to as the “asymmetrical dominated alternative”. In plain English: we can increase the likelihood of choosing an option by placing it next to an inferior alternative — or even a third ‘decoy’ option.

An everyday example of such persuasion method is the three size cup options routinely offered in coffee shops. Intentionally, the medium cup costs closer to the price of a large cup — given the bargain people then choose the larger cup.  And end up paying that extra cost. Here, the unattractive medium-size cup (the decoy) push you to spend more by

  1. making the large serving deal to look attractive
  2. making it more straightforward for you to decide.

The decoy suddenly made the small size cup an ‘invisible’ option. The airline industry uses the same method to sell expensive tickets by experimenting with decoys for stopover waiting times.

The A/B test

To test if we could encourage consumers to make better decisions regarding their money, we’ve selected 300 customers with the following criteria:

  • Users with active invoices
  • Received their first reminder but haven’t paid and therefore gotten a reminder fee.
  • After their first penalty, they have not paid yet

We divided the group into two:

  • Group A (control): 50%
  • Group B (experiment): 50%

If a customer hasn’t paid an invoice after the first penalty, it takes 10 more days before they get a second reminder via Email and SMS. In our A/B test we tweaked the design of the second reminder.

The control group (A) continued to receive the traditional second reminder text message and e-mail. Both contain the overdue invoice, the next penalty date, and the penalty amount. The experiment group (B) received a different nudge-oriented email message.

Following the concepts of present-preference and asymmetrically dominated choice biases, we re-designed the email message as follows (See figure 2.)

Fig 2. A redesigned presentation of invoice reminder

We made the following intentional nudging changes:

  • We increased the feeling of imminence. Specifically, by visualizing how few days remained until the next penalty and by using a red dot as an alert.
  • We changed the timing. Customers got the warning message on the cusp of their second reminder penalty to increase the feeling of urgency.

We also implemented the asymmetrically dominated choices bias concepts:

  • the user sees a starkly apparent attractive vs unattractive choice  — paying now vs face a hefty penalty
  • there’s a link that leads directly to the user’s invoice — which made it easier for them to pay immediately.


Variation B’s observed conversion rate (70.09%) was 29.62% higher than variation A’s conversion rate (54.07%). The significant test result had a 95% confidence rate that this result is a consequence of the change we made and not a result of random chance. The experiment showed us we can nudge users towards better financial decisions influence customers’ invoice payment behavior by using basic behavioral economics concepts.

Final words

Persuading users by using behavioral economics is a contentious issue and for good reason. Because many market strategies use these concepts to make profits on the expense of their consumers rather than for their benefit. 

However, if used ethically, it has significant potential to facilitate self-benefiting decisions. The tricky part might be guarding yourself from behavioral economic gimmicks. Whether you are buying a plane ticket, order your morning coffee or are trying to decide on the best insurance options, ask yourself if you are really deciding based on your actual needs or if there’s a decoy or an inferior substitute trying to dupe you!


Lee, M. K., Kiesler, S., & Forlizzi, J.(2011, May). Mining behavioral economics to design persuasive technology for healthy choices. In Proceedings of the SIGCHI Conference on Human Factors in Computing Systems (pp.325–334). 

Thaler, R. H., Sunstein, C. R., & Balz, J. P. (2013). Choice architecture. The behavioral foundations of public policy, 428–439.

Huber, J., Payne, J. W., & Puto, C. (1982). Adding asymmetrically dominated alternatives: Violations of regularity and the similarity hypothesis. Journal of Consumer Research, 9, 90–98.