COVID-19 Drives 17% Increase in Contactless Payments... Surge in Donghak Ant Account Transfers

The Bank of Korea's 'Recent Domestic Payment Trends Since the Spread of COVID-19'
Payment Card Usage Plummets in All Regions Except the Capital Area

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] Due to the impact of the novel coronavirus infection (COVID-19), the amount of non-face-to-face payments from January to September this year increased by 17.0% compared to the same period last year, while face-to-face payments decreased by 3.7%.

Additionally, small individual investors known as Donghak Ants transferred deposits for stock investment purposes from banks to securities firms, leading to an increase in internet banking (including mobile banking) and firm banking.

According to the Bank of Korea's statistics on 'Recent Domestic Payment Trends after the Spread of COVID-19' on the 3rd, the usage performance of payment cards from January to September this year slightly increased compared to the same period last year, but the growth rate showed signs of slowing down.

By card type, the growth rate of credit cards (0.2%) and check cards (2.4%) slowed down, whereas prepaid cards (770.6%) increased sharply due to the use of emergency disaster relief funds.

Monthly, after a significant decrease of 7.4% and 4.4% in March and April respectively, the trend turned to a 0.9% increase in May when the emergency disaster relief funds began to be used. Since then, the growth rate has continued from the 1% range to the 6% range, recovering to the usual level. A Bank of Korea official analyzed, "The usage performance of payment cards has steadily increased from 2018 to the present," and "The performance, which had stalled for a while due to COVID-19, is returning to the usual level."

By usage type, face-to-face payment amounts decreased by 3.7% (1.4 trillion KRW per day), while non-face-to-face payment amounts increased by 17.0% (800 billion KRW per day) compared to the same period last year. However, even in face-to-face payments, physical plastic cards decreased by 5.6%, whereas mobile devices and others increased by 18.0%. By access device, both face-to-face and non-face-to-face payments showed an increase in preference for payments through mobile devices, etc. (17.2%), while the scale of payments using physical cards (5.6%) rather decreased.

Looking at individual credit card usage performance, electronic commerce (24.1%) increased compared to the same period last year due to the preference for non-face-to-face transactions during the same period. By industry, increases were seen in automobiles, insurance, telecommunications fees, and utility bills, while decreases occurred in travel, education, and entertainment/culture.

By region, all areas except the metropolitan area (5.8%) decreased compared to the same period last year. In particular, the decrease was large in Jeju (-11.3%), which was heavily affected by the travel industry slump, and Daegu/Gyeongbuk (-7.7%), where there were many COVID-19 confirmed cases.

This content was produced with the assistance of AI translation services.