The authorities see stage one as getting rid of the metal money by 2020. The Bank of Korea on Thursday announced it will step up its efforts to reduce the circulation of coins, the highest denomination of which is worth less than $0.50.
Instead it wants consumers to deposit loose change on to Korea’s ubiquitous “T Money” cards — electronic travel passes that can be used to pay for metro fares, taxi rides and purchases.
South Korea is technically savvy with mobile payments and online shopping pretty much being the norm. It is already one of the world’s least cash-dependent nations and has the highest rates of credit card ownership. Only 20 percent of Korean payments are made using paper money.
Coins are expensive. Korea spends $40 million annually minting them. Banks spend a fortune collecting, managing and circulating them.
The government also hopes that the shift towards electronic payments will help shrink the informal economy, boost the state’s coffers and boost overall growth.
Globally, Scandinavian countries are leading the charge towards cashless societies. More than half of Sweden’s 1,600 bank branches neither hold cash nor take cash deposits. Norway’s biggest bank, meanwhile, this year also called for a cashless society.