Newly printed 50,000-won banknotes are piled up at the Bank of Korea in Seoul, Jan. 14, prior to the Lunar New Year holiday, when cash demand is high due to a tradition of giving monetary gifts to children. Yonhap

Bae Young-sook, a receptionist at a tourist information center in central Seoul, has been receiving more inquiries from foreign tourists in recent years, as they have been unable to use cash at buses or franchise cafes.

"These tourists are especially perplexed when they come to Korea right after traveling to Japan, where cash is preferred over other means of payments, partly due to security reasons in the event of an earthquake and other disasters," Bae said.

The inconvenience experienced by international visitors hints at the possible downsides of being overly reliant on cashless payments in the middle of Korea's speedy transition into a cashless society.

According to the Bank of Korea, cash steadily makes up a smaller share of means of payment made by households over the years. For instance, the share fell from 38.8 percent in 2015 to 32.1 percent in 2018 and 21.6 percent in 2021.

In contrast, credit and debit cards combined accounted for 37.4 percent of households' means of payment in 2015, 52 percent in 2018 and 58.3 percent in 2021.

According to the Korea Consumer Agency, cash is increasingly not accepted for bus rides across the country after the Seoul Metropolitan Government adopted a cashless payment system for its buses in 2021.

Data from the Korea Federation of Banks showed the number of ATMs run by 15 commercial banks for cash withdrawal also fell from 36,146 in December 2019 to 27,076 in July 2024.

"Such lower reliance on cash should be accompanied by a more secure system for digital financial transactions, but Korea certainly has improvements to make to consolidate such a system," Jung Ho-chul of Citizens' Coalition for Economic Justice, a civic activist group, said.

Jung said that telecom firm KT in 2021 experienced a large-scale disruption to its communication services, impacting internet, phone calls, as well as electronic payments nationwide.

He also pointed out that a fire at a data center run by information technology service company SK C&C in 2022 caused a major service failure, primarily impacting the country's widely used messaging app KakaoTalk and other affiliated services. The affected services included mobile payments.

"These two disasters were caused by human errors, and the scale of the disasters can be even greater in the event of natural disasters," Jung said.

He suggested the government ensure that cash can be used as "a last-minute option" against the possible failure of the complex network of digital systems. "This option is also crucial against cyberattacks, mainly from North Korea, whose hackers have been stealing cash to support the impoverished regime."