Korea Minting, Security Printing & ID Card Operating Corporation (KOMSCO) swung to a profit from a loss in 2021. That year, new revenue came from the mobile ID business and exports of specialty ink, both launched for the first time. As society moved toward being "cashless," revenue from printing banknotes and minting coins steadily declined. Inside and outside KOMSCO, people are saying that "now side businesses rather than the mainstay are becoming the 'cash cow.'"
◇ "Who uses cash?" Crisis for KOMSCO, which used to make money printing bills
KOMSCO was launched in 1951 as a currency manufacturing agency. It has since generated revenue by producing banknotes and coins on orders from the Bank of Korea. Starting in the 1990s, it manufactured physical IDs such as resident registration cards and passports. That is because anti-counterfeiting technology required for banknote production is also essential when making IDs. As a result, until 2000, half of the corporation's revenue came from currency, and the other half from non-currency businesses such as IDs.
However, as credit cards and mobile payments took off, the corporation's profitability began to wobble. In 2020, the corporation posted its first operating loss in 22 years (14.2 billion won). That was due to a decline in the volume of currency issued, from 740 million banknotes in 2015 to 630 million in 2020. Coin issuance also plunged, from 620 million pieces in 2015 to 140 million in 2020. Passport issuance also dropped sharply due to the pandemic.
◇ Mobile IDs and security ink businesses using banknote anti-counterfeiting technology become "cash cows"
In 2020, the corporation declared an emergency management regime and began seeking new revenue sources. The first new business to bear fruit was the "mobile ID business." Pushed by the government, the program lets people store and use six types of IDs—including resident registration cards and driver's licenses—in a smartphone application (app). In 2021, the corporation was designated the government's "mobile ID specialist agency," and has received 74.5 billion won in government funding over five years through this year.
The corporation also localized and exported anti-counterfeiting security ink, which it had relied on imports for, in 2021. It is currently exporting 50 types of specialty ink to three countries: Switzerland, Canada, and Uzbekistan. Exports rose from about 4 billion won in 2021 to about 13 billion won last year. In addition, the corporation created a Cultural Content Division last year to bolster its currency-themed merchandise business. It generated 2 billion won in revenue last year. Using byproducts from the banknote production process, the corporation produced items such as ballpoint pens, keyrings, cushions, and calendars. It also made limited-edition commemorative coins.
Thanks to these new businesses, the corporation posted 639.5 billion won in revenue and 18.7 billion won in operating profit last year. Both revenue and operating profit were the highest since its founding. The share of revenue from non-currency businesses rose to 88% last year.
◇ The next growth engine is "artistic bullion coins"
The corporation has set its sights on "artistic bullion coins" as a new growth engine. Artistic bullion coins are legal currency issued by Central Banks with face values stamped on precious metals such as gold and silver. They mainly feature national symbols. Representative examples include the United States' Eagle, Canada's Maple, China's Panda, and Australia's Kangaroo coins. The global market is estimated at about 20 trillion won.
Korea issues commemorative coins to mark national events, anniversaries, and historical incidents. However, it does not officially issue artistic bullion coins. To issue artistic bullion coins, approval from the Ministry of Economy and Finance and a resolution by the Bank of Korea's monetary policy committee are required. Seong Chang-hun, president of Korea Minting, Security Printing & ID Card Operating Corporation (KOMSCO), said, "We are discussing ways to introduce artistic bullion coins with relevant ministries, including the Ministry of Economy and Finance and the Bank of Korea," adding, "Our goal is to issue artistic bullion coins within this year."
Seong went on to say, "Our goal is to become a leader in the 'minting industry' that goes beyond a simple currency manufacturer and combines ICT, Fintech, and the cultural industry," adding, "We will expand our business scope to digital IDs, cultural content, and stablecoins to create new growth engines."