Korea is gearing up to move to a so-called “coinless society,” with the central bank announcing plans to pilot a service in which consumers would get change back from merchants onto a prepaid card.
According to a report, the central bank in Korea had been mulling the idea for more than a year and said the move is deigned to “ease the inconvenience of using and carrying coins and reduce the social costs incurred in their circulation and management.”
The report noted that, based on a study conducted by the central bank that interviewed 2,500 consumers, it found that 62 percent said they carry coins, but close to half said they never use the change they get back from purchases. The pilot program is kicking off at convenience stores in the country. That’s because convenience stores tend to do large volumes of small transactions that are typically paid for with cash.
In addition to launching a pilot to attempt to move to a coinless society, the report said the Financial Services Commission (FSC) in Korea is looking into extending the frontiers of innovation and will launch a pilot program in which authentication at the point of sale is done through a vein on the palm. That means consumers can pay for things without cash or a credit card. That service is being called BioPay.
In July, the U.K. and Korea teamed up to jointly provide support to FinTechs. Under the deal, U.K.-based FinTech companies and investors have access to the Korean market, and Asian investors and Korean FinTech companies have access to the U.K. markets. The agreement, which garnered approval from the Financial Conduct Authority in the U.K. and the Korean Financial Services Commission, will make it possible for regulators in both countries to collaborate and provide information about financial innovation. Korea is a newcomer to the FinTech market, but the country is focused on developing a regulatory environment that fosters rapid growth, said Yim Jong-yong, chairman of the FSC. The FinTech bridge is another piece of deepening a relationship between the two.