Do You Know the Electronic Currency 'K-Cash'? ... A Lonely Exit After 20 Years

Domestic Banks Jointly Develop
Falling Behind New Payment Methods

[Asia Economy Reporter Jo Gang-wook] The electronic currency 'K-CASH,' jointly developed by all domestic banks, will disappear into history after 20 years since its launch. Once recognized as an advanced payment method, its status has plummeted to the point of near invisibility, overshadowed by various transportation cards, check cards, and simple payment systems.

According to the financial sector on the 6th, the electronic currency K-CASH service, which has been jointly issued by banks including Shinhan, KB Kookmin, NH Nonghyup, Hana, Woori, SC First, IBK Industrial, and Daegu Bank, will end on December 15. Since all issuance, charging, payment, and inquiry services will be discontinued, only balance refunds will be possible thereafter. Consumers holding K-CASH can visit the bank branch where they issued their card or use ATMs to receive balance refunds.

K-CASH, an abbreviation for 'Korea Cash,' is an electronic currency developed in 1998 with the participation of the Bank of Korea, the Korea Financial Telecommunications & Clearings Institute, and all domestic banks. The service started in 2000 and became the only legally recognized electronic currency in Korea under the Electronic Financial Transactions Act enforced in January 2007. It is a prepaid card format that is charged in advance, with a maximum charge amount of 500,000 won.

At the time of its launch, expectations were high that cash would be rapidly replaced as a payment method because the central bank, the Bank of Korea, led the initiative with the participation of all banks. There were even forecasts that related software and hardware companies would emerge as 'electronic currency beneficiary stocks (eP@y stocks).' One securities firm released a report predicting that with the advancement of e-commerce, electronic currency would spread widely among young people, leading to increased consumption tendencies and a major restructuring of the overall consumer goods and distribution industries in the long term.

However, usage began to decline after peaking in 2003 due to competition from credit cards equipped with transportation card functions and prepaid transportation cards. In the transportation sector, prepaid transportation card operators like T-money increased their market share, and postpaid transportation card functions of credit and check cards became established. The Nara Sarang Card function, used in military units, was neglected as an environment where credit cards could be smoothly used was established. Additionally, the recent activation of mobile simple payment systems and the increase in various electronic payment methods accelerated K-CASH's exit.

According to the Bank of Korea, the total electronic currency usage amount, including K-CASH, shrank from 34.776 billion won in the fourth quarter of 2003, when related statistics began to be compiled, to 95 million won in the second quarter of this year. Among this, K-CASH usage is understood to be less than 1 million won per month.

A financial sector official explained, "With the recent increase in various payment methods centered on mobile pay, projects linked to K-CASH have ended, and performance is almost nonexistent," adding, "Participating banks concluded that there is no longer any reason to maintain the service and decided to terminate it this year."

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