[Report] Paying Cash and Receiving Change in Bank Account... Utility in the Card-Using Era is 'Not Sure' (Comprehensive)

Customer "Who pays cash at convenience stores these days?"
Staff "Change deposit service? What is that?"

[Asia Economy Reporter Park Sun-mi] "You want me to deposit the change into my bank account? I've never done that before... I didn't even know such a service existed."

On the 9th of this month, about a week after the 'Deposit Change Directly into My Account' service was launched, a reporter visiting a Ministop convenience store in Yeouido, Seoul, bought a bottle of water and paid with 10,000 won in cash. When asked to deposit the change into a bank account, the convenience store clerk showed a puzzled expression, saying, "I don't know how to do that."

When the reporter, who was familiar with the procedure, said, "I'll insert my cash card into the terminal, so please deposit the change," the clerk looked confused but soon complied with the request. Shortly after, a receipt titled 'Change Cash IC Account Deposit' was printed, indicating that the change had been deposited into a Woori Bank-issued card account. The clerk admitted, "I didn't even know this service existed," and confessed, "This is the first time I've served a customer asking to deposit change into their account."

Since the 3rd of this month, the 'Deposit Change Directly into My Account' service has been available at 2,570 Ministop branches nationwide. Using this service, customers can pay cash at convenience stores and receive their change directly into their bank accounts. It is possible to deposit even coins like 10 won or 50 won, with a maximum deposit of 10,000 won at a time and up to 100,000 won per day. However, to receive change into an account, customers must have a physical bank cash card or a mobile cash card in QR code or barcode format.

'Deposit Change Directly into My Account' Service One Week After Launch
Most People Unaware... Concerns Raised About Activation

However, most people on the ground were unaware of the system itself. Not only convenience store owners and staff but also customers did not recognize the service, indicating a lack of promotion. The situation was similar at other Ministop convenience stores. Even after visiting several stores, no notices or instructions about depositing change into accounts were found.

Many also expressed skepticism about the service's practical activation. Jeong Jae-young (23, pseudonym), who came to buy a drink at a convenience store, questioned, "Who still uses cash at convenience stores these days?" He added, "Among those who use cash, many prefer not to leave a record of card usage, but if the change is deposited into a bank account, a record remains, so I don't think people will use this service." Another office worker, Seol Min-su (45, pseudonym), who visited a different convenience store, responded negatively, saying, "To receive change into a bank account, you have to present a physical cash card or a mobile cash card, but if you're going to show a card anyway, it's more convenient to just pay by card."

[Image source=Yonhap News]

Era of Using Credit Cards Instead of Cash... Questions Raised About Effectiveness
Advantage: No Need to Carry Coins When Using the Service

Questions about the service's effectiveness have also been raised, as the use of credit cards continues to increase instead of cash. According to the '2019 Payment Methods and Mobile Financial Service Usage Survey Results' released earlier this year by the Bank of Korea, the amount of cash held decreased across all age groups. The proportion of credit card use expanded from 29.3% in 2017 to 43.7% last year.

This surpassed the cash usage proportion (26.4%). This year, with the impact of the COVID-19 pandemic leading to more people staying home, mobile transactions have become even more active, likely widening this gap further.

Of course, the service has its advantages. Even if coins come out after a cash payment, there is no need to carry them around. Currently, to exchange coins for bills or deposit them into a bank account, one must visit a bank branch equipped with coin exchange machines. Not all branches have such machines, and some banks limit coin exchange hours to a few hours in the morning or afternoon.

Bank of Korea to Expand Service to Hyundai Department Store and Emart24 by Year-End
All Banks Participating in the Service

The Bank of Korea plans to expand this service not only to Ministop but also to Hyundai Department Store and outlets, Emart24, and others by the end of the year.

Led by the Bank of Korea and operated by the Korea Financial Telecommunications & Clearings Institute for system processing, all domestic banks are participating in this service. Currently, NongHyup, SC, Woori, Shinhan, Suhyup, Jeonbuk, Daegu, Gyeongnam, Busan, Jeju, and NongHyup Suhyup are participating, and by year-end, Industrial Bank of Korea, Hana, Kookmin, Industrial, and Gwangju banks are expected to adopt the service.

From the financial institutions' perspective, although this service does not significantly contribute to profitability, they are compelled to participate. A representative from Bank A said, "Since the Korea Financial Telecommunications & Clearings Institute operates on bank contributions, banks involved in building the IT system (shared cash card network) for this service participate unconditionally without considering its effectiveness," adding, "Even if change is deposited into bank accounts, it doesn't significantly help bank profits."