S. Korea’s digital transaction up 20% in H1 amid social distancing

2020.09.15 08:33:24

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Daily digital payment transactions in South Korea surged 20 percent in the first six months of the year as more consumers opted for easy and fast contactless mobile and online payment services while staying home to prevent the spread of COVID-19, data showed Monday.

According to data released by the Bank of Korea, the daily average transactions via digital payment services came at 322.6 billion won ($272.5 million) in the January-June period, up 20.3 percent from the previous six-month period last year. Digital payment transaction volume also increased 4.7 percent to 2.91 million during the same period.

The digital transactions linked to credit cards jumped 12.1 percent to 213.9 billion won and the transaction volume 8 percent to 7.31 million.

Digital payment service or smart payment refers to a financial service that allows consumers to pay or transfer money via online or mobile payment methods that only require easy and fast verification process such as a password. Korea’s Kakao Pay and Toss, as well as Pay Pal and Apple Pay are popular options.

An unnamed BOK official said that social distancing measures imposed to slow the spread of COVID-19 has led to an increase in digital money transfer.

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Digital payments spiked the most in e-commerce transactions that take up the largest market share, data showed.

The market for payment gateway or e-commerce payment platform that offers various payment solutions rapidly expanded over the cited period as consumers have turned to online transactions to avoid contact during the coronavirus outbreak.

The total payment transactions via gateway service reached 676.9 billion won in the first six months of the year, up 15.3 percent from the previous six-month period. The transaction volume also jumped 32 percent to 17.82 million.

Pre-paid electronic payments, a method for transportation and e-commerce services, also increased 26.9 percent to 430.6 billion won, data showed.

By Lee Eun-joo

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