The Bank of Korea, South Korea's federal bank, has announced that the country will be beginning a pilot with the goal of eliminating physical coins. Beginning Thursday, the country will allow citizens to transfer the small amounts of money left over from cash purchases onto their prepaid or mobile cards.
To be sure, the pilot project from the Bank of Korea only includes a few businesses within the country, so a completely coinless South Korea won't yet be a reality. Even still, the businesses participating are massive chains like Seven Eleven, E-Mart, Lotte Mart, and Lotte Department store — some of the biggest retailers in the East Asian country.
The pilot is a response to the costs that are associated with coins. In 2016 alone, South Korea spent 53.7 billion won (equivalent to $47 million) on coin production.
Coin-Replacing Prepaid Cards
Bank of Korea is Piloting a Prepaid Card to Replace Physical Coins
Trend Themes
1. Digital Payment Adoption - The pilot project in South Korea to replace physical coins with prepaid cards highlights the growing trend of digital payment adoption.
2. Prepaid Card Innovation - The Bank of Korea's pilot project presents an opportunity for prepaid card companies to innovate and offer new solutions for convenient and secure digital transactions.
3. Coinless Retail Experience - As South Korea moves towards a cashless society, retailers can explore ways to create a seamless shopping experience with the absence of physical coins.
Industry Implications
1. Digital Payments - The digital payments industry can leverage the coin-replacing prepaid card pilot project to further enhance their platforms and attract more users.
2. Prepaid Card Providers - Prepaid card providers can capitalize on the opportunity to develop innovative prepaid card solutions that eliminate the need for physical coins.
3. Retail - The retail industry has the chance to transform the customer payment experience by embracing the concept of a coinless retail environment and integrating prepaid card systems.