The nation’s major retailers will dispense with paper receipts as they plan to complete a new mobile checkout system by the end of this year, the Ministry of Knowledge Economy said Wednesday.

Shinsegae Department Store, the nation’s No. 2 retailer, is the first to adopt the system at its Jukjeon, Gyeonggi Province, branch where the digital receipts will replace paper stubs starting Thursday.

Shinsegae Group, which developed the e-receipt system with the support of the government, will extend the program to all department stores and other outlets of its affiliate E-Mart by December.

Under the new system, customers can receive receipts for their purchases on their smartphones. The system will also will be used for parking, exchanges and refunds of purchased items, and other promotional events.

To use the digital receipt service, people can download a mobile app, which is now available only for Google’s Android operating system, while the version for Apple’s iPhone will come out in December, the ministry said.

Smartphone users whose handsets support near-field communications also can make a purchase by just swiping their phones and receive the electronic receipt on their phones.

“If the system succeeds here, the retail industry as a whole could save 23 billion won ($20 million) annually in what was used for paper receipts,” said a ministry official.

Adding to the cost-saving and improved privacy security within the retail industry, the ministry predicted the market for the e-receipt system will see 25 percent growth per year.

Alongside Shinsegae, Family Mart, the country’s top convenience store chain, also will start the service at all of its 7,000 locations nationwide within the year, the ministry said.

The ministry plans to invest a combined budget of 2.4 billion won into the project by December.

By Lee Ji-yoon (jylee@heraldcorp.com)