Seoul's cashless bus system faces public backlash

A banner hangs in front of a Seoul city bus announcing the new cashless fare payment system launched from Mar. 1 in Seoul's central Jung District, Mar. 1. As of that day, about one out of four buses in the capital removed fare boxes to accept only automated payment methods. Newsis

Elderly feared to fall victim to new fare collection scheme

By Lee Hae-rin

Seoul's latest transport policy of removing fare collection boxes and expanding cashless payment methods on a quarter of the city's buses has faced a backlash as people without access to electronic banking services and the elderly are feared to fall victim to the automated fare collection system.

Starting in March, 1,876 city buses on 108 routes, or 25 percent of the total, only allow passengers to pay by card or app following a five-month trial run on 171 buses serving eight routes.

Other local governments are following suit.

The metropolitan cities of Daejeon and Incheon have been expanding their cashless bus lines, while the government of Gyeonggi Province surrounding Seoul plans to start test operations of automated fare collection methods in Gimpo starting March 24.

On these cashless buses, passengers pay their charge by scanning credit cards, pre-paid transportation cards or mobile transportation payment apps. Those who do not have such payment methods can first ride on the bus and deposit the amount into the operating company's bank account later, as instructed in a handout distributed by the bus drivers.

The change came in the wake of a decrease in the number of passengers using cash to pay bus fares.

According to the Seoul city government, the rate of passengers who pay bus fares by cash decreased continuously, from 1.25 percent in 2018 to 0.6 percent last year. The city government estimates the rate would drop further to 0.1 percent in five years.

Cash is no longer the dominant payment method in Korea. The Bank of Korea's (BOK) latest triannual report on the use of paper currency from 2021 shows that only 21.6 percent of payments made nationwide is done by cash. The number of people who have been rejected trying to make cash payments at restaurants and stores rose from 0.5 percent in 2018 to 6.9 percent in 2021.

The new fare collection method is also cost efficient, according to the city government.

About 2 billion won ($1.5 million) is spent every year to maintain the city bus's cash-based system. The cost includes fare box maintenance, labor costs for counting, transporting, and monitoring the transparent management of cash collected, a city government official from the bus policy bureau explained.

Drivers also seem to welcome the change.

"It felt weird to board a bus without the fare box at first," a bus driver surnamed Kim said during an interview at a bus garage in Northern Seoul, Friday. However, he finds the new system convenient, which allows him to focus on driving and lifts the pressure of watching passengers pay the right fees.

However, those who still depend on cash ― particularly, people without access to electronic banking services and the elderly ― are struggling with the new fare payment system on buses.

Park, a 72-year-old Seoul resident, was one of those who were perplexed on Friday morning to see the fare box removed.

"I couldn't think for a moment," Park said, explaining that he is "too old and slow" to use bank and transport payment applications. He said he "feels embarrassed" but will try to adapt to the new system, which the bus driver and a passenger next to him explained.

The Seoul city government's announcement launching a cashless bus fare payment system hangs on a stop near Seoul Station on Mar. 1. Yonhap

Kim and other Koreans aged over 70 account for 40 percent of the population who still use cash, according to the BOK's 2021 report. The figure is significantly higher than those between their 20s and 40s, whose rate was around 10 percent each.

The new fare collection method could marginalize those who have limited access to credit cards or digital payment systems, according to Koo Jeong-woo, a sociology professor at Sungkyungkwan University. Limiting bus fare payment methods could violate their rights, the professor explained.

Many experts, including Professor Yu Jeong-whon from Ajou University's Transportation System Engineering Department, believe the cashless system reflects the country's changing times, but they all agreed that alternative methods are needed.

"Just like bus tickets and tokens, it's about time for cash payments (on buses) to disappear into history," Yu said, referring to the old payment methods introduced in the mid-20th century, which were replaced by bus cards in 1999 and 2004, respectively.

"However, the new system needs to also provide alternative means of payment and meet the needs of minorities in the transition period."

Sung Tae-yoon, a professor of economics at Yonsei University, agreed with Yu, explaining the cashless payment method is a nationwide trend. However, cash, as a basic payment method, should remain universally accepted and functional and local governments should provide solutions to protect those who are cash-dependent or have a tough time using digital devices.

The Seoul government plans to monitor the operation of the cashless payment system and provide solutions to support those who feel left out by the change, the official said.