While cash usage is decreasing, South Korea still uses cash considerably, making it the second most used payment method after credit cards.
Cash Usage in South Korea: An Overview
Although digital payment methods are gaining popularity, cash remains a significant part of the South Korean economy. Let's examine the specifics:
- Cash as Second Most Used: Cash holds the position as the second most frequently used payment method in South Korea (see Graph 2 in the provided reference), with credit cards being the most popular.
- Decline in Cash Usage: According to a Bank of Korea (BOK) survey (BOK 2023: 13), the proportion of cash transactions has decreased in recent years.
- By transaction volume, cash use dropped from 26.4% in 2019 to 21.6% in 2021.
- By transaction value, cash use declined from 17.4% to 14.6% during the same period (BOK 2023: 13).
Trends in Payment Methods
The table below provides a quick summary of the changing trends:
| Measurement | 2019 | 2021 | Trend |
|---|---|---|---|
| Volume of Transactions | 26.4% | 21.6% | Decreasing |
| Value of Transactions | 17.4% | 14.6% | Decreasing |
Factors Influencing Cash Usage
Despite the increasing adoption of digital payment methods, several factors contribute to the continued use of cash:
- Traditional Preferences: Some individuals still prefer using cash for its perceived simplicity and anonymity.
- Small Transactions: Cash is often favored for small purchases, such as street food or items from smaller vendors.
