In Korea, cash is no longer king
Consumers are using credit cards over bills at the checkout line
Cho, a 25-year-old college student, received his monthly allowance in cash when he was in high school. Now, every time he goes out to shop or eat, he mostly swipes his credit card, which he uses to pay transit fees. These days, he rarely uses notes or coins.
Like Cho, more Koreans are relying more on plastic cards, particularly credit cards, as their prime method of payment and less on cash, according to government data.
“The key characteristics of payment means that Koreans based their answers on were convenience, security, acceptances and cost,” the Bank of Korea said Wednesday in a report on payment methods.
Based on data compiled from June 2015 to July 2016, Korean adults on average carried about 77,000 won ($64) in their wallets. Young adults in their 20s, like Cho, carry the least amount of cash, about 53,000 won on average. The older the consumer, the more money they carried.
Those in their 30s and 40s, for instance, had about 76,000 won and 87,000 won each in their wallets at all time. Koreans in their 50s carried the most cash, or 90,000 won on average. Those 60 or older carried 76,000 won.
Although the average amount of cash found in Koreans’ pockets increased by about 3,000 won compared to 2015, the BOK’s report showed that less cash left people’s wallets this year.
Seventeen percent of the total amount that Koreans spent was in the form of cash last year. This number, however, dropped to 13.6 percent this year.
On the flip side, Koreans swiped credit cards 50.6 percent of the time for their payments last year, and that figure rose to 54.8 percent this year. The frequency of credit card swipes rose from 34.2 percent last year to 50.6 percent this year, while cash usage went from 37.7 percent to 26 percent, indicating a growing trend in preferred payments.
While 22.8 percent of respondents said they liked using cash the most, 66.4 percent favored credit cards over any other method. More than 10 percent picked debit cards as their favorite means of payment.
“This was the first time that we added preference clause into our survey so this is new information,” said Kim Min-seo, a researcher in the payment and settlement systems department of the central bank. “People who preferred credit cards over other means picked convenience of storage and management as the main reason for their preference.”
BY CHOI HYUNG-JO [firstname.lastname@example.org]