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Going 'Dutch' viral in Korea as more apps fit the bill

With the help of evolving fintech and the introduction of new bill-splitting features by the Financial Services Commission early next year, going Dutch using a smartphone app is becoming easier and spreading to more people in Korea. / Graphic by Cho Sang-won

By Ko Dong-hwan

The gracious gesture of paying for others, usually at a restaurant or bar, is deeply rooted in Korean social culture. It is mostly taken for granted that the eldest in a group, a person who has just received a paycheck or anyone who has had some luck will say, "This one's on me."

But such culture has not been without its complainants, who believe that going "Dutch" is more reasonable. While adults in their 40s or older tend to stick to the old way, many millennials prefer the new method.

Because many eateries don't split bills, those who want to go Dutch have had to know the banking details of their dining companions to divide the cost.

But advancements in fintech are changing all this, thanks to a growing number of smartphone apps offering easy methods to go Dutch.

The latest breakthrough is the "credit card Dutch pay service" the Financial Services Commission plans to launch early next year. When a person pays for a group, the service ― using an app containing a digital replica of their credit card (known as app card) ― enables the others to send money to that person. Use of the service is restricted to restaurants, cafes and bars where going Dutch is most common.

The service's biggest plus is that it offers "Dutch payers" a tax refund on card expenses, which those who wire money through bank sites or other platforms do not enjoy.

To prevent criminals abusing the service ― paying someone else's card debt or withdrawing cash to lend it with higher interest ― the commission will add a safety feature that requires going Dutch to be completed in a day.

"Since many young adults use app cards these days, the new service will easily settle," a card company official said.

Korean government officials, including Land, Infrastructure and Transport Committee Chairman Cho Jeong-shik (far right) and the former Minister of Land, Infrastructure and Transport Kang Ho-in (second from right), line up to go Dutch at a restaurant. Splitting bills at restaurants, bars and cafes is usually unwelcome as cashiers find it cumbersome. / Yonhap

Other app-based tools helping people go Dutch include Toss, Naver Pay, Kakao Pay and Payco. Toss, the most popular money-wiring app in Korea, is convenient to use, in that it doesn't require a bank account number or electronic certificate but only needs a phone number from the address book in a mobile device. Fintech startup Viva Republica introduced the app in February 2015. Up to September, transactions have topped 7.5 trillion won ($6.6 billion).

Kakao Pay, a side-menu app available on Korea's most popular messaging app KakaoTalk, has further stoked the money-wiring trend. It was introduced in 2014 but has only gained momentum recently, with transactions reaching 230 billion won in August, compared with 97 billion won the previous month.

Money-wiring is expected to become more popular as Korea's major banks introduce products to a market that dedicated apps now dominate.

"With strong capital power and loan services, banks can offer an extensive range of combined services on digital platforms, allowing customers many choices," a business management professor from Sogang University said.