Busan Taps Ddanggyo for Low-Fee Delivery, Ending Public App Era

Busan, South Korea — Busan Metropolitan City signed a business agreement with Shinhan Bank on Thursday to launch a public-private delivery support initiative using the bank’s proprietary food delivery app, Ddanggyo. The deal introduces a 2 percent commission model for merchants and integrates the platform with the city’s local currency, Dongbaekjeon, enabling cashback benefits for users and promotional support for small businesses.

The signing ceremony was held at the city hall's international protocol room and attended by Busan Mayor Park Heong-joon, Shinhan Bank President Jeong Sang-hyuk, and representatives of civic, consumer, and small business organizations. Under the agreement, participating local merchants will be able to join the platform with no listing, advertising, or maintenance fees. Payments made through Dongbaekjeon will return 7 percent cashback to consumers starting August 1, with additional government-backed discount coupons also eligible for use on the platform.

The agreement marks a shift in Busan’s approach to food delivery support policy. In 2022, the city launched its own public-sector delivery platform, Dongbaektong, as a zero-fee alternative to commercial services. Despite initial momentum during the COVID-19 period, the platform was decommissioned in 2024 after sustained losses, low usage, and complete budget defunding by the city council.

The new partnership with Ddanggyo reflects a pivot from in-house platform development to private-sector collaboration. Unlike Dongbaektong, which relied on public funds for operation and promotion, Ddanggyo is a commercial platform operated by Shinhan Bank and funded through a business model based on discounted transaction fees. Its integration with local policy tools—namely, Dongbaekjeon and city-issued consumption coupons—is designed to maintain public policy alignment without direct administrative overhead.

Under the memorandum of understanding, Shinhan Bank will offer a 2 percent intermediary fee to merchants in Busan who join the Ddanggyo platform. Additional fees—including onboarding, advertising, and monthly service charges—are waived entirely. Merchants using a designated Shinhan Bank settlement account will receive same-day payment transfers. The bank also pledged ₩1.4 billion in special funds to back merchant financing, as part of a ₩20 billion credit program, with interest support from the Busan Credit Guarantee Foundation.

Consumers using Dongbaekjeon on the platform will receive 7 percent cashback per transaction. Government-issued relief coupons—distributed as part of Busan’s broader household recovery campaign—can also be used through Ddanggyo, although such transactions will be excluded from cashback eligibility. The city plans to roll out interface improvements by September to allow users to check their Dongbaekjeon balance directly in the app during checkout.

Busan is not the first local government to collaborate with Ddanggyo. In recent months, several municipalities have signed similar agreements with Shinhan Bank, often with variations in incentive structure and policy focus.

In Seoul’s Yangcheon District, local authorities are offering ₩200,000 in direct onboarding subsidies to new merchant sign-ups, with an additional ₩100,000 in coupons provided to businesses that register Shinhan settlement accounts. The district also announced plans to issue a localized Ddanggyo gift voucher, offering residents discounts on qualifying purchases.

In Chungcheongnam-do Province, counties such as Hongseong have followed suit, extending ₩200,000 in support payments to local business participants. However, integration with local currencies and cashback structures remains limited compared to Busan’s approach. Most of these partnerships are promotion-driven, lacking the direct policy alignment observed in Busan’s delivery-local-currency convergence model.

Busan’s primary differentiator lies in the integration of Ddanggyo with Dongbaekjeon, the city’s official local currency program. Unlike other regional partnerships that focus primarily on promotional grants, Busan is leveraging existing fiscal infrastructure to tie the delivery platform to a broader consumer incentive ecosystem. This includes automated cashback, public coupon eligibility, and merchant settlement benefits underwritten by the city’s financial institutions.

Moreover, the program incorporates a tiered public campaign: in addition to immediate cashback, consumers who spend more than ₩180,000 in Dongbaekjeon coupons by the end of August will be automatically entered into a lottery offering cash subsidies between ₩20,000 and ₩50,000. Merchant participation is similarly incentivized through automatic entry upon new platform registration.

Trade-offs and Limits in Busan’s Delivery Model

While the Ddanggyo partnership offers potential advantages over direct municipal platform operation, it also introduces structural constraints that may affect long-term policy efficacy.

The city no longer retains full operational control over the platform. Core elements such as interface updates, service prioritization, and consumer data management fall under the authority of the private operator. Although the agreement enables integration with Busan’s fiscal programs, the city’s role is effectively limited to that of a policy sponsor and promotional partner rather than a platform administrator.

Additionally, despite the relatively low 2 percent commission, the partnership deviates from the zero-fee model previously offered under Dongbaektong. The shift reflects a trade-off between cost-free public operation and commercially viable sustainability. Whether the lower fee structure will produce meaningful uptake among merchants and consumers remains to be seen, particularly in a market dominated by high-visibility private competitors with entrenched user bases.

The effectiveness of the cashback and coupon schemes will also depend on continued budget support. Most incentives outlined in the agreement—including cashback, lottery eligibility, and promotional integration—are scheduled to run through August 31. The absence of guaranteed continuation beyond this period could impact both user retention and merchant confidence in the platform’s future utility.

Data access presents an additional limitation. Without direct control over transaction records or user behavior analytics, the city may face challenges in evaluating program outcomes or adjusting policy in real time. Unless formalized data-sharing mechanisms are established, the ability to audit performance or monitor market shifts will remain constrained.

The city’s adoption of a public–private model through Ddanggyo represents a pragmatic response to the operational shortcomings of its earlier public delivery initiative. By outsourcing platform management to a private entity while retaining influence through financial incentives and local currency integration, Busan aims to balance administrative efficiency with policy direction.

However, the model’s success will hinge on several unresolved factors: the durability of consumer benefits beyond the promotional period, merchant participation rates in the absence of direct subsidies, and the degree to which the city can monitor and shape the platform’s performance despite its limited technical oversight.

As with other municipal delivery strategies, the Ddanggyo partnership will be judged not only by its launch metrics, but by its capacity to deliver measurable economic support to small businesses over time. Without mechanisms for sustained funding, transparent performance evaluation, and scalable merchant onboarding, the initiative may face the same structural fatigue that ended its predecessor.

The shift toward private collaboration offers new flexibility—but it also demands new forms of accountability.