Toward a coinless KoreaThe Bank of Korea has begun a trial service to make a “coinless society.” When customers make purchases at any of 23,000 retail shops including convenience stores and E-mart and Lotte Mart stores around the country, they now have the choice of getting their small change as deposits on their public transit cards or mobile wallets or as reward points for later use. The central bank plans to expand the service to pharmacies by 2020.
The ultimate goal is to ditch hard currency. Issuance of coins last year was reduced for the first time ever in line with monetary digitalization. Half of e-commerce transactions last year were made on credit cards. When including debit cards, two thirds of online shopping is made by card. The share of cash in all transactions dipped to 26 percent. Gone are the days when we had to exchange money into overseas currencies when going abroad or check if there is enough cash in the wallet when going out. Coins are scarcely needed. We use cards or bills to use public phones or vending machines. The central bank can save greatly when it issues fewer coins.
But the economically weak and inactive could become disadvantaged. Many senior citizens and minors do not have debit or credit cards. They cannot easily access mobile or electronic payment systems. Credit delinquents and the poor are denied credit cards.
The transition must not make their lives more difficult. There are some businesses that live off coins. They will have to come up with alternative universal payment system for their products.
Going digital is an irreversible trend. The central bank is right to act in line with the trend. But immediate side effects are inevitable in all transitions. We need not rush with the transition if it harms or gives hassles to the weaker members of our society and economy. The Bank of Korea should not enforce or expand the service blindly for the sake of reaching its goal.
JoongAng Ilbo, April 22, Page 26