By Kim Boram
SEOUL, Oct. 12 (Yonhap) -- On an ordinary weekday in downtown Seoul a middle-aged woman walks into a Starbucks to order a cup of coffee.
When she takes some paper bills out of her purse to pay the cashier, he politely refuses them and points to a notice at the entrance.
"This store doesn't accept cash, you see. We would appreciate it if you pay for your order using your credit card, debit card or our mobile application card," the cashier explained.
Surprised, the woman muttered some words of complaint, but soon presented one of her plastic cards to pay for her drink.
This kind of squabble over the means of payment is a common scene in the many Starbucks locations in the capital city since the Korean unit of the U.S. coffeehouse launched its "cashless stores" campaign earlier this year.
Starbucks Coffee Korea Co. picked three stores in major office districts -- Gangnam and Guro in Seoul, and Pangyo, just south of the capital -- and started a trial run in April.
Three months later, the company expanded the number of "card-only" stores to 103, as going cashless is hardly strange -- at least to South Korean coffee lovers.
According to Starbucks Korea, 30 percent of purchases were made by cash in 2010, but the number had dropped to 7 percent in 2017.
"A vast majority of Korean customers use non-cash payment tools like credit cards and other mobile cards," Starbucks Korea CEO Lee Seock-koo said earlier. "Korea's digital infrastructure is well set up and more comprehensive compared to others'."
Young people, who are very familiar with smartphones, are welcoming the trend.
"I've been using credit cards or Starbucks' mobile card for years. I can't remember when I paid cash at a coffee shop," said Lee Seon-hee who works for a financial firm in Seoul. "Generally, I don't carry any paper bills or coins in my purse. I don't experience any inconvenience at all."
Recent data indicate that Lee is an average South Korean. Only 20 percent of goods purchases were paid in cash in 2017, down from 26 percent a year earlier, according to data by the Bank of Korea (BOK).
Moreover, a growing number of people have opted to even ditch their plastic. Instead, they use mobile payment services like Samsung Pay or Kakao Pay to buy goods and take public transportation. Mobile remittance services are widely used among young people.
The country's central bank is also behind the movement to phase out cash from the market as part of efforts to reduce the cost of producing new currency. The BOK spent 6.17 billion won (US$5.4 million) to replace damaged banknotes and coins last year.
Under the BOK-led "coinless society project," launched last year, consumers can deposit small change left from purchases of goods into prepaid mobile cards that can be later used at convenience stores and department stores.
From a global point of view, South Korea is not the only country looking toward a cashless future.
Sweden is a frontrunner in the so-called demonetization trend. Consumer cash payments in the Scandinavian country fell to 15 percent in 2016, with retailers legally allowed to reject hard currency.
Buses and subways stopped accepting coins, and instead have issued mobile tickets or bar codes, while more than half of commercial banks do not handle cash reserves.
"A cashless society enjoys wider transparency, safety, efficiency and convenience in settlement and payment," said a report by KB Research. "In particular, non-cash payments will help financial transactions become more transparent and reduce the underground economy."
For both businesses and consumers, cashless purchases help cut transaction times and reduce cash-related crimes like theft and counterfeit bills.
Still, there are doubts about the feasibility of completely doing away with cash and the security surrounding the current payment network.
Despite the rapid growth of non-cash transactions, cash remains a reliable source of payment even in South Korea, especially among older people.
According to a satisfaction survey conducted by the BOK last year, cash was the most trusted means of payment with a score of 82.1 points. Credit cards earned 78 points and debit cards scored 74.5.
People in their 60s and 70s made an average of 15 cash purchases per month last year, but they paid with a credit card less than 10 times.
South Koreans still have an average 80,000 won in cash in their wallet or purses at any given time, with those in their 50s carrying 100,000 won on average, said the BOK poll.
Also, instead of a lower risk of cash theft, electronic payment data can become the target of hacking that could lead to a leakage of personal data.
"There must be a detailed schedule to becoming a cashless society, considering that certain age groups are in danger of being left behind," said the report by the KB Research. "We also have problems with possible data breaches and privacy protection."
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