Korea is the next country in the world planning to end cash slowly. The country’s Central Bank outlined a pilot program to pursue a coinless society in the coming years. This new service allows consumers to receive small change from retailers as a top-up on a prepaid card. An interesting spin on things, although it may quickly sell the end of physical coins and banknotes in Korea.
This new venture by the Korean Central Bank sounds quite appealing, on paper. Rather than forcing a banknote swap or making specific currency invalid, they seek to alter the way we handle change cash. Every time a cash payment is made, the change we receive becomes somewhat of a burden. Turning that amount into a prepaid card top-up utility is quite innovative.
A Coinless Future Awaits Korean Residents
According to a Central Bank spokesperson, this new project will ease the inconvenience of using cash. Additionally, it will reduce the social costs associated with the circulation and management of physical currency. A cost-reducing effort with a right frame of mind can be a positive development in Korea. After all, this change will slowly erode cash from society, rather than cause a drastic change overnight.
The decision to go coinless is made due to a recent survey. A total of 2,500 consumers shared their experiences and opinions on the current coin situation in Korea. Nearly half of those polled indicated they don’t sue coins when receiving them as change for a cash payment. This begs the questions on the use of these coins is in the first place, and how things can be improved. Going coinless seems to be the right strategy at this time, although its success is not guaranteed.
The current plan is to run this pilot program at nationwide convenience stores. Most of these retail locations to process a large volume of small cash transactions. Moreover, the convenience stores will provide customers with this new top-up service for their prepaid cards. It appears there will no fee for this new service, making it a free alternative to dealing with coins.
More news coming out of Korea revolves around the usage of palm vein authentication. To be more precise, this new form of authentication will be enabled at the select point of sale locations. Consumers will be given the opportunity to pay for goods and services without using a payment card. Under the BioPay banner, it is expected this service will roll out later this year in Korea.
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