Cardless transactions on the rise
The way Lee and his friends split their bill is emblematic of how Koreans are increasingly relying on electronic payment services like Liiv to conduct transactions. Aside from money transfers between individuals, more Koreans are using such payment services to purchase goods online, with the average amount of transactions per day reaching over 340 billion won ($303 million) in 2016, according to the Bank of Korea.
“With online shopping becoming a common part of life, the amount of transactions made through payment gateway services and escrow rose 36.7 percent and 23.5 percent each to 245.0 billion won and 56.3 billion won,” the central bank said in a report.
Payment gateway service providers facilitate transactions between buyers and sellers immediately, as opposed to escrow, where the service provider receives money from a buyer and sends money to the seller only after confirming the product or services were rendered.
With payment gateway services and escrow leading the way, the total amount of daily transactions last year posted 343.5 billion won ($305.85 million), a 36.1 percent increase compared to 2015. Daily transaction amount through electronic payment services stood at 252.4 billion won in 2015 and 221.8 billion won in 2014, when the central bank began tracking the data.
Electronic bill payment also witnessed a palpable jump last year. The average daily amount for 2016 was 11.6 billion won, rising 68 percent from 2015. Last March, the Financial Services Commission, the country’s top financial regulator, allowed credit card companies to start services where customers can pay apartment maintenance fees and utility bills online.
On the other hand, transactions through electronic debit payment instruments fell over 90 percent last year compared to 2015. Electronic debit payment instruments provide services through which buyers can wire money from a registered account to the account of the seller. Transactions through this service tanked to 3.5 million won in 2016. The Bank of Korea said consumers turned to more convenient means of transactions like the Kakao Pay and Payco apps.
BY CHOI HYUNG-JO [firstname.lastname@example.org]