Koreans over 50 trade in cash for debit cardsSong Kyung-hee, a 56-year-old farmer in Yeongju, North Gyeongsang, cut up her credit card a couple of years ago and has been using a debit card since.
“With credit cards, you don’t really know how much you actually spend until you get the bill at the end of the month,” she said. “And it’s too cumbersome to withdraw and carry around cash, which is why I prefer a debit card.”
Song is typical of her generation. Debit card usage has more than doubled among Koreans in their 50s or older in the past five years, according to an analysis by KB Kookmin Card, a subsidiary of KB Financial Group.
“[Based on our findings] the number of debit card users among Koreans who are 50 or older has surged from 32.6 million in 2012 to 113.4 million in 2016, a 247.9 percent rise,” said the company in a report.
According to company data, the amount of spending by the older population through debit cards went from 1.2 trillion won ($1.04 billion) in 2012 to 3.3 trillion won in 2016, a 183.9 percent jump.
“Along with the more frequent usage of debit cards by people in their 50’s or older - who traditionally preferred cash - the fact that debit card users in their mid or late 40’s in 2012 became 50 or older by 2016 brought about such a result,” the report added.
“Other than the fact that it’s cumbersome to have too much cash in my wallet,” Song said, “it has gotten more difficult to use ATM machines with more bank branches closing down around where I live.”
Song now has to travel as much as 20 minutes to get to the nearest branch of her bank.
In comparison, the number of debit card users in their 20’s went up by 148.8 percent in the same period, and for people in their 30’s by 119.7 percent.
The total spending increased by 88.5 and 78.3 percent respectively.
But the average amount of spending per transaction has gone down across the board over the past five years.
The data by KB showed spending per user for those in their 50’s went from 35,221 won per transaction in 2012 to 28,726 won in 2016, which is a 18.4 percent fall.
Average spending by those younger than 20 tumbled the most, from 13,401 won to 10,075 won in the span of five years, or a 24.8 percent decrease.
By gender, Korean males showed a more drastic retreat than their female counterparts, with the average transaction amount for men falling 23.1 percent compared to 16.8 percent for women
“Looking at the trends of the past few years, it is quite conspicuous that the older generation began preferring debit cards while overall, consumers make smaller payments with debit cards,” said a spokesperson from KB Kookmin Card. “Shift in consumers’ perspective on debit cards as well as continuous growth in demand calls for diversification of services and products.”
BY CHOI HYUNG-JO [firstname.lastname@example.org]