Last Year, Daily Electronic Payment Surpassed 700 Billion Won... Impact of 'Jipkok' Due to COVID-19

[Asia Economy Reporter Eunbyeol Kim] With the surge in non-face-to-face online transactions due to the COVID-19 pandemic, the daily average usage of electronic payment services exceeded 700 billion KRW last year.

According to the "2020 Electronic Payment Service Usage Status" announced by the Bank of Korea on the 29th, the usage of electronic payment agency services recorded a daily average of 16.788 million transactions and 705.51 billion KRW, increasing by 48.5% and 32.7% respectively compared to the previous year. In terms of amount, the daily average electronic payment usage rose sharply from 427.3 billion KRW in 2018 to 531.7 billion KRW in 2019, and reached the 700 billion KRW level last year.

Electronic payment agency services refer to services that transmit and receive payment information or mediate and settle payments so that the payment from the buyer in e-commerce can be ultimately paid to the seller. A Bank of Korea official explained, "This was mainly due to the expansion of non-face-to-face online transactions influenced by COVID-19."

The usage of prepaid electronic payment services, which issue and manage prepaid funds that can be used to pay transportation fares, commercial payments, or remittances, recorded a daily average of 18.64 million transactions and 467.6 billion KRW. The number of transactions increased by 6.3% compared to the previous year, and the amount increased by as much as 59.4%.

For electronic financial companies, although the use of prepaid transportation cards decreased due to a sharp decline in face-to-face class days, the usage of simple payments and remittances expanded significantly, maintaining an upward trend. For financial companies, emergency disaster relief funds and local gift certificates were issued in the form of prepaid cards, resulting in a significant increase compared to the previous year.

The usage of payment escrow services also increased by 24.5% in the number of transactions and 23.9% in amount, recording a daily average of 2.58 million transactions and 120.3 billion KRW. Escrow is a service in e-commerce where payment from the buyer is held in escrow and, after confirming the receipt of goods and other processes, the payment is made to the seller.

Meanwhile, the usage of simple payment and simple remittance services last year recorded a daily average of 14.55 million transactions and 449.2 billion KRW, increasing by 44.4% and 41.6% compared to the previous year. This service refers to payment and remittance services using simple authentication methods (e.g., passwords) after the mandatory use of public certificates was abolished. It has been surveyed separately from payment service statistics since 2016.

The Bank of Korea evaluated, "As non-face-to-face online transactions continue to expand, the use of simple payments through electronic financial companies has greatly increased," and "Among payment methods, the increase in prepaid-based usage was particularly notable."

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