Annoying Coin Conversion to Points... NongHyup Bank to Start Next Month (Comprehensive)

Accumulate NH Points and Use Like Cash
Available at Hanaro Mart, Gas Stations, and More

Kwon Joon-hak, President of NongHyup Bank

[Asia Economy Reporter Kiho Sung] NH Nonghyup Bank will become the first financial institution to allow customers to accumulate points from coins and other small change at all branches starting next month. Although the Bank of Korea is conducting a 'Change Accumulation Service' targeting financial companies and retail businesses, this is the first time a bank is independently offering such a service. The distinctive feature is that points can be used not only for financial transactions but also for online and offline shopping. As this is the first attempt to accumulate points instead of coins, which have been neglected due to increased card usage and inconvenience, attention is focused on whether this will spread to other banks.

According to the financial sector on the 29th, Nonghyup Bank will apply the method of accumulating NH Points instead of coins at 1,118 branches nationwide (as of the 28th) starting next month. Since the Bank of Korea spends well over 10 billion KRW annually to mint new coins, this aims to reduce coin usage.

The core of this service is to allow customers to accumulate points from the change received after financial transactions at Nonghyup Bank branches. Customers can use the accumulated points for 13 services at the bank counter, including fee payments, product subscriptions, and overseas remittances. From next year, the bank plans to expand point usage to more areas such as passbook reissuance and continuous insurance premium payments, allowing points to be used like cash.

The scope of use will also be expanded beyond banking transactions to include Nonghyup’s financial and retail companies. Starting next year, NH Nonghyup Life Insurance, NH Nonghyup Property & Casualty Insurance, NH Investment & Securities, NH Nonghyup Capital, and NH Nonghyup Savings Bank will allow the use of NH Points for loan interest and subscription service payments. Linked with NH Members, points can also be used at Nonghyup Mall, Nonghyup Gas Stations, and Nonghyup Hanaro Mart. This means that change from bank transactions can be used for both online and offline shopping.

Nonghyup Bank expects this service to significantly reduce the use of small change itself. According to the Bank of Korea, as of September this year, the average number of coins held per person is estimated to be about 454. For a family of four, this means more than 1,800 coins are stored in one household. As payment methods like credit cards have become widespread and cash usage has decreased, the number of unused and neglected coins has steadily increased from 404 per person in 2011. Because so many coins are not circulated in the market, the Bank of Korea and the Mint have to spend considerable costs annually on coin production. Over the past 10 years (2011?2020), the cost of coin production alone has reached 467.4 billion KRW.

Since September last year, the Bank of Korea has been providing a service that deposits change into bank accounts for 17 financial institutions and 3 retail companies. However, as of the second quarter of this year, the cumulative number of uses and amount were only 6,162 cases and 37.36 million KRW. Considering that the three retail companies operate 8,000 stores nationwide, this means many stores have never provided the service.

In the financial sector, this service is seen as a result of the digital transformation (DT) initiatives promoted since the inauguration of NH Nonghyup Bank President Junhak Kwon. In fact, the 'Coinless Branch' was selected as a DT project in the first half of this year, and the results have been applied in the field in less than a year.

President Kwon said, "I am pleased that the coin point accumulation system of NH Points being launched this time actively responds to the government's 'Coinless Society Campaign.' Going forward, Nonghyup Bank will continue to develop customer-centered platforms, thinking of customers from small aspects of daily life."

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