If you're planning a trip to South Korea anytime soon, you might be wondering whether you need to exchange and bring cash with you or not.
Or If you have been to South Korea already, you might realize that it was pretty rare to hear and see "pay with cash"
Well, let me tell you - I've never used cash nor heard "Cash or Card" in the last 7 years. As a Korean living in Seoul, I've seen how quickly cashless payments have taken over in recent years at first hand.
In this post, Let's find out how and why it happened! The reasons behind this trend and How South Korea has become a leader in cashless payments.
The Rise of Cashless Payments in South Korea
If you're tired of carrying around cash and coins, you'll love South Korea! All you need to do is just go out with your smartphone.
South Korea is one of the leading countries in adopting cashless payments. According to the Bank of Korea, cash transactions only accounted for 19.8% of all transactions in 2018, down from 40% in 2015. Recently, the digital payment ratio might increase further due to COVID-19.
Why do we Koreans love mobile payments and credit/debit cards so much?
The Popularity of Mobile Payment Platforms: Easy and Accessible
One of the main reasons is convenience. I mean, who wants to carry around a bunch of coins and bills when you can simply use your smartphone to pay for everything?
Mobile payment platforms like Samsung Pay, KakaoPay and Naver pay are super popular here. It's not hard to see why. With just a few taps on your smartphone, you can pay for everything, even taxes and public transportation.
Additionally, there are more advantages of mobile payments other than just payment. People can get issued electronic documents from public offices and keep them. And even ID cards can be issued and carried as mobile identification cards. These apps also offer rewards and cashback incentives to encourage people to use them. So there is no reason not to use them in Korea.
Kakao Pay, Naver Pay, and Samsung Pay are the top three mobile payment platforms in South Korea, making up the majority of the market share [75.8%]. But there are now also many other payment services available, like Coupay, Payco, Tosspay and SSGpay. But the interesting thing is that Apple Pay is not available in Korea yet.
And credit/debit card payments are widely accepted as well. Many people prefer using cards instead of cash because they offer rewards and cashback incentives too!
Technology's Role in the Trend
South Korea has some seriously advanced IT infrastructure, like one of the world's fastest and most reliable internet networks, which makes it easy for us to use mobile payment apps and other digital payment methods.
Online banking and platforms like Samsung Pay, Kakao, and Naver have made it possible to make transactions without cash. So they're widely accepted by businesses across the country.
And, of course, with the widespread use of smartphones, it has become easier than ever to make payments.
It's a game-changer for anyone who wants to simplify their life and embrace the digital age.
Government Policies That Encourage Cashless Payments
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One of the main reasons is the government's push towards a cashless society. The South Korean government has recently introduced several policies and initiatives to promote cashless payments.
The South Korean government has proactively encouraged the switch to electronic payment systems through various policies and initiatives.
For example, In 2015, the government introduced a tax deduction scheme for small business owners who accept cashless payments.
From tax incentives to subsidies for small businesses, the government and All innovations of FinTech have made it easier for consumers to embrace the trend.
Conclusion
As for South Korea, the trend towards a cashless society shows no signs of slowing down. With the government's continued support and people using more technology-based methods, it is likely that cashless payments will continue to dominate the market. As more people start using mobile payments(older people and foreigners), we'll probably see even less cash in the future.
I'd say that the shift towards a cashless society in South Korea has been a positive one. Cashless transactions are faster, more efficient, and cheaper than cash transactions. And with less risk of fraud and theft, we can all feel a little more secure when we're out.
But don't get me wrong - I know there are definitely some downsides to a cashless society.
Nowdays, not only Korea but also the world is moving toward a cashless society. I will focus more on the pros and cons of cashless society next time.
Ah, By the way, If you're planning a trip to South Korea, make sure you have a mobile payment app or a credit/debit card with you. Cash might not be accepted everywhere!
FAQ
Q1. Is it safe to use mobile payment systems in South Korea?
A2. Yes, mobile payment systems in South Korea use encryption technology, making them secure.
Q2. Are mobile payment systems widely accepted in South Korea?
A2. Yes, mobile payment systems are widely accepted in South Korea, and they are used for various transactions, including public transportation, convenience stores, and online shopping.
Q3. What are the benefits of using mobile payment systems in South Korea?
A3. Some benefits of using mobile payment systems in South Korea include convenience, security, and rewards programs.
Q4. Are there any parts of South Korea where cash is still commonly used?
A4. While cash usage has declined across the country, there are still some rural areas where cash is more prevalent.
And maybe some street vendors still accept only cash.
Q5. How has the shift towards cashless payments impacted traditional banks in South Korea?
A5. Traditional banks in South Korea have had to adapt to digital payments, and many have launched their own mobile payment platforms to stay competitive. However, some experts predict that the shift towards cashless payments could ultimately lead to the decline of traditional banks as consumers increasingly rely on non-bank digital payment providers.
Q6. How does South Korea's experience with cashless payments compare to other countries?
A6. South Korea is often cited as a leading example of a cashless society, but other countries are also making progress towards reducing cash usage. For example, Sweden and China have also significantly shifted towards digital payments recently.
Q7. What impact has the COVID-19 pandemic had on the shift towards cashless payments in South Korea?
A7. The pandemic has accelerated the shift towards cashless payments in South Korea, as many consumers have become more cautious of handling physical cash. Additionally, the government has encouraged the use of digital payments to reduce the spread of the virus.