ATM Deposit and Withdrawal and Merchant Transactions via Smartphone App
Change After Payment Also Transferred to My Account Through the App
[Asia Economy Reporter Kim Eunbyeol] From now on, anyone with a commercial bank account will be able to withdraw cash from ATMs and other machines using a smartphone app without needing a plastic Cash IC Card (cash card). Payments can be made through the mobile app not only with credit or debit cards but also with cash cards, and change can be directly deposited into the account via the app. Recently, a preference for using cash cards has emerged among younger generations, and with the addition of mobile functions, the use of cash cards is expected to steadily increase.
The Bank of Korea announced that starting from the 3rd, the Mobile Cash Card Service, a bank account-based mobile debit service jointly promoted by banks participating in the Financial Informatization Promotion Council (FIPC), will be officially launched. The FIPC is a financial sector consultative body chaired by Bank of Korea Deputy Governor Yoon Myeon-sik, which has been promoting financial informatization projects. It currently consists of a total of 30 institutions including financial companies and related organizations.
The Mobile Cash Card Service provides the Cash IC Card (hereafter cash card) service, which was previously offered based on plastic cards, through a mobile platform. Anyone with a bank account can use the service simply by downloading the mobile cash card app.
◆Cash withdrawal from any bank ATM using the app= The biggest advantage of this app is that it allows users to withdraw cash from ATMs/CD machines. By simply scanning the app on the smartphone reader at the ATM, users can withdraw cash from any bank (16 banks by the end of this year) using their smartphone. Although some banks previously offered the ability to withdraw cash via an app, it was only available at ATMs of the bank where the account was held.
Users can make payments even if the bank where they hold their deposit account and the merchant’s bank are different. Cross-use of CD/ATM machines among banks that have implemented the service is also possible.
The banks starting the service from this day are SC First Bank, NongHyup, Jeju Bank, NongHyup Central, Suhyup, Suhyup Central, Woori Bank, Daegu Bank, Jeonbuk Bank, and Gyeongnam Bank, totaling 10 banks. Shinhan Bank and Busan Bank will start the service within this month, while Industrial Bank of Korea, KDB, Hana Bank, and Gwangju Bank will launch it in the second half of the year.
◆Payment possible via smartphone app... Service starts at NongHyup Hanaro Mart= After activating the app, payments can be made using the QR code or barcode displayed on the screen. Starting today, payments can be made at about 300 NongHyup Hanaro Mart directly operated stores. When the app is recognized by the mobile payment reader, the payment amount is immediately deducted from the account. It is expected that by the second half of this year, the service will be available at Emart24, Ministop, Hyundai Department Store, and others.
A Bank of Korea official said, "In response to the trend of payment methods based on mobile devices spreading, embedding cash cards into smartphones is expected to enhance consumer convenience. In particular, since cash withdrawal and deposit services can also be used on a mobile basis, the burden of carrying plastic cards will be alleviated."
Compared to the average merchant fees of 2.07% and 1.48% for credit and debit cards respectively last year, the lower cash card fee of around 0.3~1% is also expected to be welcomed by merchants. Unlike credit cards, cash cards do not incur costs related to the issuing bank’s funding, voucher processing, bad debt handling, or credit evaluation, and the timing of payment deposits to merchants is usually advanced from three days to the next day.
The issuance of cash cards in Korea has been steadily increasing. As of the end of last year, the total number of cash cards issued was 250 million, growing at an average rate of 9.7% annually over five years. Of these, about 120 million were bank-issued cash cards, accounting for nearly half of the total. During the same period, the number of cash card transactions increased by 293.3% to 141,300, and the transaction amount rose by 75.8% to 2.43 billion KRW compared to the previous year.
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