Incheon considers 10% cashback and 500,000 won monthly limit for e-Eum

Incheon Metropolitan City is considering maintaining a 10% cashback rate with a monthly limit of 500,000 won for its local currency, Incheon e-Eum, to support small businesses. Song Hyeon-seok, head of the city's Fiscal Budget Reform Task Force, stated that research indicates the optimal economic multiplier effect occurs within a monthly range of 300,000 to 500,000 won at a 10% cashback level.

The city aims to prevent regressive effects where high-income earners disproportionately benefit by using the currency for large, pre-paid expenses like private academy fees. To address this, the city plans to review merchant criteria and usage patterns to ensure the program effectively revitalizes local alleyway economies rather than just providing universal cash benefits.

In the short term, the city will apply a 10% cashback rate with a 1,000,000 won monthly limit from September 21 to September 30, before lowering the limit to 500,000 won starting in October. This policy adjustment comes as the city faces fiscal challenges, including sluggish acquisition tax revenue and rising welfare costs.