Mobile payment accelerates demise of coins, banking branches
Last year, the number of newly minted coins hit the lowest value on record and the number of banking branches continued to drop, according to data on Monday.
The Bank of Korea, the nation’s central bank, said newly issued coins last year amounted to some 36.4 billion won ($30.9 million) in value, the lowest since comparable data started being compiled in 1992 and down 14.3 percent from a year earlier.
The figure is even lower than the 39.6 billion won worth of newly made coins in 1998, when the nation’s economy collapsed amid the Asian financial crisis.
500 Korean won coins (Yonhap)
The number of newly issued coins has been on a downward trend in past years -- 103.1 billion won in 2015, 91.2 billion won in 2016, 49.5 billion won in 2017 and 42.5 billion won in 2018.
However, existing coins being traded in the market last year reached a record 2.38 trillion won, up 0.2 percent on-year.
Market analysts say the increasing use of mobile payment will reduce inefficiency stemming from the minting and use of coins and accelerate the transition toward a cashless society.
“Nowadays, both online and offline businesses revolve around online payment,” said an official in the local payment services sector, adding, “Efforts by the government and the private sector to achieve a cashless society will gain further momentum down the road.”
Separate data showed that the rise of online and mobile payment services also affects the banking industry.
The number of brick-and-mortar branches operated by the nation’s five major commercial banks -- Shinhan Bank, KB Kookmin Bank, Woori Bank, KEB Hana Bank, and NH Bank -- further dropped in 2019.
The five banks ran a combined 3,885 branches in Korea in September last year, down 8.2 percent from 4,230 in September 2016.
In the past few years, the banking industry has seen an increasing number of offline branches close, in line with banks’ efforts to cut costs.
While reducing their number of human staff, banking companies have increasingly deployed what they call “advanced teller machines” to serve customers.
The number of advanced teller machines used by the five banks increased 224 units in September 2019, up 91 units from a year earlier. The figure stood at 39 in 2016 and 78 in 2017.
By Kim Young-won (firstname.lastname@example.org)