Traffic (T-money) Card
If you think you will use bus or subway a lot, you may want to buy
a traffic card (so-called "T-money card"). Compared to paying the fare
in cash, you can save 100 Won for each ride. It is particularly useful
for bus-bus or bus-metro transfer because the transfer is free and so
you can save 900 Won for each transfer.
It is important to remember that you have to check
your card whenever getting on and off as other passengers do.
For details read
FAQs on fare system.
Many people can share one card in bus; just
tell the bus driver the number of people (but not possible in the subway).
The price of the cheapest card is 1,500 Won (with limited functionality)
but it is hard to find these days.
The most popular one is sold for 2,500 Won
in every subway station, some kiosk near bus stop and some
convenience stores such as GS25, FamilyMart and so on.
Wikipedia has a nice article on T-money: