Korea lays down plans for a 'coinless society'

Korea lays down plans for a 'coinless society'

Korea's Central Bank has outlined plans to pursue a 'coinless society' project by piloting a service that allows customers to receive small change from merchants as a top-up onto a pre-paid card.

The central bank has been ruminating over the plans for the past year. It says that the project will aim to "ease the inconvenience of using and carrying coins and reduce the social costs incurred in their circulation and management".

A survey conducted among 2500 consumers by the a Central bank policy group found that while 62% admitted to carrying coins, almost half of those polled said they did not use them even when they received them as change.

The pilot programme will initially be run among the country's convenience stores, which typically conduct large volumes of small cash transactions and provide customers with top-up services for their pre-paid cards.

Separately, the country's Financial Service Commission is also looking to extend the frontiers of innovation, announcing plans to launch a pilot of palm vein authentication at the point-of-sale, enabling consumers to pay for goods and services at the check-out without the need for showing a physical plastic payment card. The service, dubbed BioPay, will be operated with the support of the major card companies.

Comments: (3)

A Finextra member
A Finextra member 10 January, 2017, 13:051 like 1 like

That's what the UK Gov't should have been doing too! Instead of bringing out new coin designs. I am pretty sure that if the coins were made illegal in the UK (or any other country, for that matter), there would be a lot of wining first, then everyone will adapt and move on. But that would only work if an adequate alternative is in place. Visa and MasterCard already mandated contactless interface in retail by 2020; we now need special low acquiring rates for small-value transactions and a bit of political will - to catch up with Korea.

Bo Harald
Bo Harald - Transmeri, Demos, Real Time Economy Program,MyData - Helsinki Region 10 January, 2017, 14:44Be the first to give this comment the thumbs up 0 likes

Why are people using cash in the first place? Causing a 50 billion euro cost to merchants in EU. Transparent pricing needed!

Hitesh Thakkar
Hitesh Thakkar - SME - Fintech startups (APAC and Africa) - India 12 January, 2017, 13:59Be the first to give this comment the thumbs up 0 likes

When most of the countries are having cashless ( or Less Cash) society on its agenda, top-up for spare changes ( ofcourse, presently spares change paid to charity has been promoted by several retailers) to pre-paid cards is good option.

I found BioPay also interesting initiative but again, cost of upgrading POS terminals at Merchant outlet needs to be considered as entry barrier. Korea can look at Indian model JAM - Jan Dhan Account - Aaadhar (Biometric Authentication) - Mobile ( Mobile with Finger print scanner) to ensure secured wireless payments can be carried out with least upgrade cost.