North Korean Workers Forced to Get Cash Cards

All factory and firm employees must have cards by August to receive their salaries.

A North Korean employee works in a bank at the Joint Industrial Park in Kaesong just a few hundred yards north of the demilitarized zone that separates the two Koreas, Dec. 19, 2013.

North Korean authorities are forcing all workers in factories and firms to obtain cash cards as a measure of convenience for receiving their salaries or purchasing items, though the cards will not likely replace the widespread use of cash in the isolated country, sources said.

Authorities are pressuring workers in the capital Pyongyang and in the provinces to pay 2,000 North Korean won (U.S. $0.25) to receive cash cards, said a source from Yanggang province, who requested anonymity.

“They are encouraging them to use cash cards for deposits and withdrawals,” he said.

Though having a cash card from the country’s central bank has been considered a symbol of wealth up to now, ordinary residents who get one are worried about being ripped off by the regime of leader Kim Jong Un, he said.

“So they are hesitating to have one issued,” the source said.

“The Central Committee is forcing managers and workers in factories and firms to have cash cards issued, even though managers don’t understand the necessity of their use” because they are accustomed to dealing with cash, he said.

The use of the cash cards, also known as debit cards, appears to be limited to certain geographical areas because there are few opportunities to use them outside the capital and provincial cities, the source said.

“Cash cards can be used in Pyongyang, but there are no facilities or systems for them in rural areas,” he said.

Starting in August, employers will deposit workers’ salaries directly into cash-card accounts, said a source from Chagang province, who declined to be named.

Secondary payment method

“Oil providers, water vendors, and gas vendors in provincial capital cities will be able to use cash cards,” he said.

“ATM machines are located in Central Bank branches and post offices [in main cities] in every province for cash withdrawals,” he said.

A cash-card system is being installed for train ticketing services beginning in August, and others should be set up soon in every department store, library, movie theater, and pharmacy, making it essential for people to have a card, the source said.

“All people’s units [neighborhood-watch units] ask for Chinese currency when they collect money,” he said, because paying with won is not popular and just about everyone in North Korea wants hard-to-get foreign currency.

North Korean currency cash cards will only be a secondary method of payment though, and will not entirely replace the use of cash, especially in black markets where paper money is the only form of accepted payment, he said.

Debit cards are nothing new in isolated North Korea. Residents of Pyongyang have been using electronic payment cards for purchases, according to a November 2012 report by the English-language Korea Times.

One of the debit cards is offered by Koryo Bank as part of a joint venture with China, and the other—the Narae card—was issued by the North’s Foreign Trade Bank in 2011, the report said.

The cards, which require prepayments in hard currency that is automatically converted to North Korean won when settlements are processed, are accepted by many hotels and department stores, especially those frequented by foreigners, such as diplomats and representatives of humanitarian organizations who work there.

Reported by Sunghui Moon for RFA’s Korean Service. Translated by Leejin Jun. Written in English by Roseanne Gerin.