February 28, 2023
SEOUL – The Seoul city government takes a big step toward cashless payments on public transportation Wednesday, as cash payments began to be phased out on buses.
A quarter of the city’s 7,394 buses, on 108 of its 370 routes, will only allow passengers to pay by card or app. The expansion is a fivefold increase from the current 418 buses on 18 routes.
Night buses are so far not being included.
Following the change, riders on cashless buses will have to tap a contactless bank card or mobile wallet to pay when boarding. Transportation cards can also be purchased or charged at convenience stores or near bus stations. The city is working on more options for people without such cards.
The dwindling number of bus passengers using cash was the tipping point in going cashless, the Seoul Metropolitan Government said.
According to the city government, the total amount of cash takings declined sharply over the decade, falling from nearly 52.1 billion won ($39 million) in 2012 to 8.2 billion won last year, while the maintenance and management costs of fare collection boxes were nearly 2 billion won.
“Bus companies had grappled with the high management costs of maintaining the fare boxes (inside buses) while cash is dying out,” a city official said in a press release.
The number of passengers using cash on Seoul buses dropped from 3 percent in 2012 to 0.6 percent last year, which is only 20,000 passengers among 3.2 million daily bus users. The city estimates that the number of cash users will decline to 0.1 percent within the next five years.
With contactless payment methods, the city government hopes to make new operational gains by allowing fast ticket purchasing and reducing lines. The city added that going cashless would allay concerns that COVID-19 could spread through cash payments as well.
The municipal government explained that the change was made to streamline bus operations, citing that passengers would benefit from moving quickly through the transit system.
According to the city, there were incidents where passengers bumped into the 10-kilogram cash boxes and were injured by the sharp edges of the boxes while picking up cash they had dropped. Large denomination notes also frequently led to problems between bus drivers and passengers.
Seoul ran a six-month pilot operation of cashless payments in October 2021, removing fare boxes from 171 buses on eight Seoul city lines and placing mobile QR codes at stations to facilitate the purchase of digital bus cards.
After the test run, the city initially planned to transition to all cashless buses, but delayed the decision considering the potential inconveniences.
Meanwhile, other cities moved toward electronic payments last year. Daejeon decided to make 945 buses on 100 routes cashless in July. Incheon expanded cashless buses from two lines to 228 buses on 17 lines in the same period.