The bold adventure into a cashless society

SOHN HAE-YONG
The author is a business news editor of the JoongAng Ilbo.

People say Korea is becoming a “cashless” society fast. I’ve wondered how that might work. So I tried living a day only using cash without a credit card. I bought a single-use ticket with cash at the subway station on the way to work. The basic fare on a transit card is 1,400 won ($1), but the single-use ticket cost 1,500 won, 100 won more. I also had to pay a 500-won deposit for the transit card, which would be returned later.

The restaurant I went to for lunch had a tablet on the table for placing orders. But it only allowed credit card payments. While I paid cash to the establishment’s owner, they scolded me, “Who pays in cash these days?” they asked.

I took a bus to go to dinner, but the bus did not have a cash box. It was a “cashless bus” that only allows transit card payment. The bus driver gave me a note with the account number to remit the fare. On my way home, my pocket was full of coins. I realized that living on cash in Korea is a challenge.

Korea is rapidly becoming a cashless society. One rarely sees people using cash; debit cards are used just like credit cards, and digital payment options such as Naver Pay and Samsung Pay are also available. Lately, children don’t get cash allowances and receive debit cards instead.

A cashless society has many advantages. It spares individuals the hassle of carrying cash, including coins. It helps to bring the underground economy to the surface, ensuring transparent taxation and enhancing the effects of monetary policy.

But that convenience has a downside. The elderly not accustomed to digital technology, foreign tourists and the financially vulnerable who cannot use credit cards are bound to suffer great inconvenience. If you accidentally leave a credit card at home, if your phone battery runs out or if there is an unexpected communication failure, you may need to use cash.

A cashless society may be an unavoidable future. But it is necessary to check whether sufficient social consensus has been reached and whether the inconvenience of the few is underappreciated. Countries like Sweden and Britain, which are going cashless faster than Korea is, have also introduced and promoted various policies to ensure the option to use cash remains.

Noteworthy is the Bank of Korea’s recent promotional message meant to guarantee “the right to use cash.” It says, “For some, cash is the only means of payment. Please be considerate and allow people to use cash everywhere so that no one is left out and cash is used safely.”