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 over dinner, arranging a friend’s coffee, or sending a quick transfer for concert tickets. It is part of modern social life. As money becomes more digital and faster, we no longer have to worry about math in our heads or worry about exchanging banknotes and coins.

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

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 that feel uncomfortable or stressful; Paying always brings with it a negative feeling.

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

Money is the last taboo

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

While “I’ll get to you next time” may seem harmless, new payment technologies like PayID, Tap and Go and instant transfers mean there are fewer excuses for delays and more potential for tension when people don’t pay. A quick transfer request may feel efficient and convenient to one person, but awkward and impersonal to another.

When we ask for payment, we change the social dynamic. There’s a whole mix of psychological reactions and insecurities involved.

These reactions can also damage the image we want to project to others. If we consider ourselves generous and caring, we may not feel comfortable asking for payment for that coffee.

Casual confessions of guilt between friends often exist in a gray area – too small to make a fuss about, but important enough to stick in our minds.

If we don’t mind shouting

Taking turns paying when we go out for dinner or coffee probably makes us happier because we don’t mind paying for those closest to us. Spending money on experiences with others actually increases our happiness, making us feel good when we give them a small treat or gift.

However, for someone we are not close to, not splitting the bill could cause problems.

Reciprocity, the expectation of getting something in return, can be coded as a kind of debt. Getting paid and then having social debt can feel unpleasant. On the other hand, some people will feel that they have been unfairly taken advantage of if there is no reciprocity.

The fear of judgment can sometimes prevent people from being honest about financial problems, even with a close friend. A recent survey found that a third of people lied about being in a better financial situation than they actually were in order to protect their social status.

The same research found that this can have an impact on relationships, with a third of people admitting they have ended a relationship because of money. Additionally, nearly seven in 10 people said they had opted out of a social gathering because they worried it was too expensive. Of these, four in ten did not tell the real reason.

There may be social costs

Social etiquette surrounding money is struggling to keep up 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 asking for a refund.

PayID has allowed us to send money to registered mobile numbers since 2018, removing the barriers of exchanging BSB and account numbers.

While it’s faster and easier than ever to transfer money, it’s the social barrier, not the administrative barrier, that’s really holding us back.

How to access the bill

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

It can be helpful to briefly mention the money in advance, for example: “Do you mind if we share this?” This is socially easier than having a discussion after someone has paid or while you are both about to pay. It feels normal to pay half the bill at a restaurant, but it can be awkward to hand over cash or transfer money to a friend later.

When we view these exchanges as an investment, rather than a debt, we feel better about it.

So the next time you’re worried about getting your money back, think of it as an investment in a friendship or connection. You’re more likely to enjoy the experience and your friendship as a result.