North Korea Has Cash Cards?

An “electronic payment card” used in North Korea. Image provided by the writer.

SEOUL – “There are cash cards in North Korea?” When I tell people that there are cash cards in North Korea, they look surprised.

In fact, North Korea has had cash cards since 2005, when the North East Asia Bank (a joint bank now called the KKG Bank) issued the Sili Card, which was mainly used by foreigners and the upper class when they paid merchants. 

When I asked fellow North Korean defectors if they had ever heard of the Sili Card, most of them had not, but most North Koreans who entered South Korea in the last five years have heard of or used the Narae Card and Jonsong Card while in North Korea.

The Narae Card was first issued by the Joson Trade Bank of North Korea in 2010, which was around the same time that the Jonsong Card was issued. 

The Narae Card is a cash card that was designed to be used by the general public and can be obtained by opening a North Korean money account or foreign currency account with the Central Bank of the DPRK and depositing a certain amount of cash.

This card utilizes an electronic payment method, and one of its main restrictions is that it can only be used to make payments in dollars and foreign currencies deposited in a foreign currency account.

When asked about the use of the Narae Card, one North Korean defector said, “I only used the Narae Card for remittances. I used it to receive money from my mom in South Korea, who sent it through a broker. The banking fee usually depends on the exchange rate of the Chinese yuan. When I received a remittance in 2019, 100 Chinese yuan was worth 135,000 to 140,000 North Korean won, and I would withdraw the money minus a banking fee of 4,000 won.” 

The defector added that North Korea appears to be using the card solely to secure foreign currency because reportedly, there is no system in place to pay by card in rural areas. 

In rural areas, there are no terminals that accept card payments and only a limited number of people use foreign currency. 

The Narae Card is mainly used for remittances but it doesn’t have a convenient system to facilitate them. 

To send money to a family member or friend, the senders need to visit a bank in their local district, provide information regarding the recipient’s resident registration card and bank card, and deposit the desired amount of money. 

Then, the recipient comes to the bank, shows the card and ID number, and withdraws the money. 

Many North Korean defectors, including those interviewed, agreed that the Narae card is one strategy for the regime to utilize foreign currency.

Unlike the Narae Card, which can only be used to pay in foreign currency, the Koryo Card, issued in 2011 by the Koryo Bank of North Korea, introduced a system that allows people to pay with North Korean currency.

In 2015, North Korea introduced two other cash cards: the Jonsong Card of the Central Bank of the DPRK, and the Songbong Card of the Golden Delta Bank of North Korea.

The issuance and use of cash cards inside North Korea is certainly a sign of change in North Korean society. 

However, the vast majority of cash cards are only used in certain areas like Pyongyang and the border region, and they’re only used by a small number of people.

Moreover, it’s also worth noting that the use of cash cards is driven by the North Korean government, which appears to be a way for the regime to secure desperately needed foreign currency.

Recently, North Korean defectors have reported that using a payment app on their phones to pay with QR codes has become popular among some young people in North Korea. 

However, those who pay through an app are still afraid to use it because it makes it easier for the regime to trace the source of funds.

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