Comprehensive Guide to Currency and Payment Systems in South Korea

South Korea has a highly developed financial system, with a mix of traditional and modern payment methods. This guide provides an overview of the national currency, payment systems, and financial practices to help visitors and immigrants navigate the country’s financial landscape.

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1. National Currency: The South Korean Won (KRW)

Overview

• Currency Name: South Korean Won (KRW)
• Symbol: ₩
• ISO Code: KRW
• Subunit: None (the won does not have smaller denominations like cents or pence).

Denominations

• Coins: ₩10, ₩50, ₩100, ₩500
• Banknotes: ₩1,000, ₩5,000, ₩10,000, ₩50,000
  • The ₩50,000 note is the highest denomination and is commonly used for larger transactions.
  • Coins below ₩10 are no longer in circulation.

Exchange Rates

• The exchange rate for the South Korean won fluctuates daily. As of late 2023:
  • 1 USD ≈ 1,300 KRW
  • 1 EUR ≈ 1,400 KRW
  • 1 GBP ≈ 1,600 KRW
• It is advisable to check the current exchange rate before exchanging money.

Currency Features

• South Korean banknotes feature prominent historical figures, such as King Sejong (₩10,000) and Shin Saimdang (₩50,000).
• Banknotes and coins are widely accepted, though cash usage is declining due to the rise of digital payments.

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2. Common Payment Methods

South Korea is a highly cashless society, with digital and card payments dominating most transactions. However, cash is still used in certain situations.

A. Cash

• Prevalence: Cash is still accepted everywhere, but its use is declining.
• Where Cash is Common:
  • Traditional markets
  • Small restaurants or street vendors
  • Rural areas
• ATMs: Widely available in cities and towns. Many ATMs offer English-language options and accept foreign cards.

B. Credit and Debit Cards

• Prevalence: Credit cards are the most common payment method in South Korea.
• Accepted Cards: Visa, MasterCard, and UnionPay are widely accepted. American Express and Discover are less common.
• Usage:
  • Cards are accepted in most businesses, including convenience stores, restaurants, taxis, and department stores.
  • Some smaller establishments may require a minimum purchase amount for card payments.
• T-Money Card: A prepaid transportation card that can also be used for small purchases at convenience stores and vending machines.

C. Mobile Payments

• Prevalence: Mobile payment systems are extremely popular, especially among younger generations.
• Popular Platforms:
  • KakaoPay: Linked to the KakaoTalk messaging app.
  • Naver Pay: Integrated with Naver’s ecosystem.
  • Samsung Pay: Compatible with most smartphones and widely accepted.
• Usage: Mobile payments are accepted in most retail stores, restaurants, and online platforms.

D. Foreign Currencies

• South Korea operates almost exclusively in KRW. Foreign currencies like USD, EUR, or JPY are not accepted for transactions.
• Currency exchange is required to use foreign money.

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3. Currency Exchange and Regulations

Currency Exchange

• Where to Exchange:
  • Banks: Offer reliable exchange services but may have limited hours (typically 9:00 AM to 4:00 PM on weekdays).
  • Currency Exchange Booths: Found in airports, major tourist areas, and shopping districts. Rates may vary.
  • ATMs: Some ATMs allow foreign cardholders to withdraw KRW directly.
• Documents Required: Passport may be required for large exchanges.

Regulations

• Cash Limits: Travelers entering or leaving South Korea with more than USD 10,000 (or equivalent) must declare it to customs.
• Exchange Limits: There are no strict limits on currency exchange for personal use, but large transactions may require documentation.

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4. General Costs for Everyday Transactions

South Korea is moderately priced compared to other developed countries. Below are some average costs:

• Public Transportation:
  • Subway or bus ride: ₩1,250–₩1,500 (using a T-Money card).
• Food:
  • Street food: ₩3,000–₩5,000 per item.
  • Casual restaurant meal: ₩8,000–₩12,000.
  • Coffee: ₩4,000–₩6,000.
• Accommodation:
  • Budget hotel: ₩50,000–₩80,000 per night.
  • Mid-range hotel: ₩100,000–₩200,000 per night.
• Groceries:
  • Milk (1 liter): ₩2,500.
  • Rice (1 kg): ₩3,000–₩5,000.
  • Eggs (12): ₩5,000–₩6,000.

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5. Opening a Bank Account in South Korea

Eligibility

• Foreigners can open a bank account in South Korea, but you must have:
  • A valid passport.
  • An Alien Registration Card (ARC), which is issued to foreigners staying in Korea for more than 90 days.
  • A local phone number (required for online banking and SMS notifications).

Steps to Open an Account

1. Choose a Bank: Popular banks include KB Kookmin Bank, Shinhan Bank, Woori Bank, and Hana Bank. Most offer English-language services.
2. Visit a Branch: Bring your passport, ARC, and phone number.
3. Complete the Application: Fill out the necessary forms. Bank staff will assist you.
4. Deposit Funds: A small initial deposit (₩10,000–₩50,000) may be required.
5. Receive Your Bankbook and Card: You will receive a passbook and, optionally, a debit card.

Online Banking

• Most banks offer online and mobile banking services in English.
• You may need to install security software to access online banking.

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6. Country-Specific Considerations and Cultural Practices

Tipping Culture

• Tipping is not customary in South Korea. Service charges are usually included in the bill.
• Exceptions: Some high-end hotels or international restaurants may accept tips.

Cashless Society

• South Korea is one of the most cashless societies in the world. Visitors are encouraged to use cards or mobile payments for convenience.

Receipts

• Receipts are provided for all transactions, even small ones. Keep receipts for tax refunds if you are a tourist.

Tax Refunds for Tourists

• Tourists can claim VAT refunds on purchases over ₩30,000 at participating stores. Look for "Tax-Free" signs and present your passport at the time of purchase.

Banking Hours

• Banks operate from 9:00 AM to 4:00 PM on weekdays and are closed on weekends and public holidays.

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7. Tips for Visitors and Immigrants

• Carry a Mix of Payment Methods: While cards and mobile payments are widely accepted, it’s a good idea to carry some cash for emergencies or small vendors.
• Learn Basic Korean Phrases: While many businesses have English-speaking staff, knowing phrases like "얼마예요?" (How much is it?) can be helpful.
• Use T-Money for Convenience: A T-Money card simplifies transportation and small purchases.
• Monitor Exchange Rates: Exchange money when rates are favorable to maximize value.

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By understanding South Korea’s currency and payment systems, you can navigate the country’s financial landscape with ease. Whether you’re visiting for a short trip or planning a long-term stay, this guide will help you manage your finances effectively.