International Money Transfer Policy: South Korea
Jan 04 2021The specific of South Korean financial system is that many big originally non-financial companies participate in payment scheme with consumers, for instance, technological companies (Kakao, Naver), shopping malls (Shinsegae, Lotte), security companies. Also even though the government has a plan to make the nation an international financial hub, they want everyone spends money in the country and domestic players are still very powerful monopolists, as a result, many foreign bank branches withdraw business from the domestic market.
(The specific financial system of South Korean is that many big companies originally non-financial industries participate in payment schemes with consumers. For instance, technological companies like (Kakao, Naver), shopping malls (Shinsegae, Lotte) and security companies. Also, even though the government has a plan to make the nation an international financial hub, they want everyone to spend money in the country which domestic players are still very powerful monopolists. As a result, many foreign bank branches withdraw business from the domestic markets. )
Government control
One of the main institutions is the South Korean central bank is the Bank of Korea (BOK). The main objective is to maintain price stability. Bank supervision is performed by Korea's Financial Services Commission and its executive arm, the Financial Supervisory Service (FSS). According to the Anti-Money Laundering law in S.Korea, each financial institution shall verify matters concerning the customer’s identity, the purpose of the financial transaction and the origin of funds for the transaction when a customer opens an account or makes a single financial transaction exceeding a certain amount of money (ie, 3 million won for a casino chip transaction, 1 million won for a wire transfer, US$10,000 for a foreign exchange transaction, etc.). If the exchange amount exceeds USD 10,000 in a year, it will be notified to the National Tax Service. Exchanges of $1,000 or more can only be done in a bank are not allowed in Currency Exchange locations.
(One of the main institutions in South Korean central bank is the Bank of Korea (BOK). Bank supervision is being performed by Korea's Financial Services Commission and its executive arm, which is the Financial Supervisory Service (FSS). The main objective is to maintain price stability. According to the Anti-Money Laundering law in S.Korea, each financial institution shall verify matters concerning the customer’s identity. The purpose of the financial transaction and the origin of funds for the transaction when a customer opens an account or makes a single financial transaction exceeding a certain amount of money (ie, 3 million won for a casino chip transaction, 1 million won for a wire transfer, US$10,000 for a foreign exchange transaction, etc.). If the exchange amount exceeds USD 10,000 in a year, it will be notified to the National Tax Service. Exchanges of $1,000 or more can only be done in a bank that is not allowed in Currency Exchange locations.)
Bank wire transfer limits and fees
Overseas remittances over $50,000 USD or equivalent is required the relevant documents such as “payment confirmation letter, a document that can confirm the transaction, certificate of tax payment, and document that can check the identification of the beneficiary. If sending money doesn't exceed any limits noticed above, for a money transfer you just need a passport and ARC (Alien Resident Card), home bank’s SWIFT code, home bank account number, the address of your home bank, Korean address and phone number. Transfer money fees by Korean banks can range between $30 and $40 USD. There may be a middle service bank fee too. If a Korean bank does not have a direct connection to the home bank, the money may have to pass through a third bank’s hands.
Major domestic banks in Korea: Shinhan Financial Group, NongHyup Financial Group, KB Financial Group, Hana Financial Group, Korea Development Bank, Woori Financial Group, etc.
(Overseas remittances over $50,000 USD or equivalent are required to submit relevant documents such as “payment confirmation letter, the document that can confirm the transaction, certificate of tax payment, and document that can check the identification of the beneficiary.”
If sending money doesn't exceed any limits mentioned above, for a money transfer, you just need a passport and ARC (Alien Resident Card), home bank’s SWIFT code, home bank account number, the address of your home bank, Korean address and phone number. Transfer money fees by Korean banks can range between $30 and $40 USD. There may be a middle service bank fee too. If a Korean bank does not have a direct connection to the home bank, the money may have to pass through a third bank’s hands. Major domestic banks in Korea: Shinhan Financial Group, NongHyup Financial Group, KB Financial Group, Hana Financial Group, Korea Development Bank, Woori Financial Group, etc.)
ATM withdrawals limits and fees
Overseas access via ATM to Korean bank accounts can be blocked by the banks so that holders cannot access their Korean bank account from outside the country. You can access your funds from outside Korea by requesting an international access card from your bank. According to the latest news, Extended Korea Payment Network (ExK) is a cross-border ATM network arrangement project completed by Bank of Korea, allowing South Korean payment cardholders to withdraw cash from ATMs in the USA, Malaysia, Vietnam, Thailand and the Philippines, using domestically issued cards, without the need for partnerships with international credit card companies. There is some information on the internet that banks sometimes limit withdrawals from your Korean bank account from an overseas bank (approx. 900$ per transaction, 5 000$ per day). ATMs fees overseas 1-2% by the bank and plus about $0.5 ~ 3.0 for ATM service (The fee varies depending on what the local ATM providers charge)
There is some information on the internet that banks sometimes limit withdrawals from your Korean bank account to an overseas bank (approx. 900$ per transaction, 5 000$ per day).
Overseas access via ATM to Korean bank accounts can be blocked by the banks so account holders cannot access their Korean bank account from outside the country. You can access your funds from outside Korea by requesting an international access card from your local bank. According to the latest news, Extended Korea Payment Network (ExK) is a cross-border ATM network arrangement project completed by Bank of Korea, allowing South Korean payment cardholders to withdraw cash from ATMs in the USA, Malaysia, Vietnam, Thailand, and the Philippines. Using domestically issued cards, without the need for partnerships with international credit card companies. ATMs fees overseas 1-2% by the bank and plus about $0.5 ~ 3.0 for ATM service (The fee varies depending on what the local ATM providers charges)
Prepaid cards
In Korea, the usage of prepaid cards, reward cards, gift cards for purchases are widely spread. The average South Korean has five credit cards, compared to the US average of two per person. The major prepaid cards are Kakao’s Kakao Pay Card, Republica’s Toss Card, Hyundai pay card, etc. Also some banks, for instance, NongHyup. Vary companies issue check cards with cash-backs, bonuses: big corporation (for instance, Samsung, Hyundai), banks (Shinhan bank, Woori, etc), shopping mall (Lotte, Shinsegae, etc), T-money card (good for transportation spendings).
(In Korea, the usage of prepaid cards, reward cards, gift cards for purchases are widely spread. The average South Korean has five credit cards, compared to the US average of two per person. The major prepaid cards are Kakao’s Kakao Pay Card, Republica’s Toss Card, Hyundai pay card, etc. Also, banks like, NongHyup. There are some companies issue check cards with cash-back bonuses: big corporations like Samsung and Hyundai, banks (Shinhan bank, Woori, etc), shopping malls (Lotte, Shinsegae, etc), and T-money card (good for transportation spendings).
Nonbank online remittance providers
Previously, only banks were allowed to offer foreign exchange remittance services. For now, non-bank online providers are allowed to send $50,000 per year and $5,000 per transaction.
Main market players: Utransfer, Western Union, TransferWise, MoneyGram, etc.
(Before, only banks were allowed to offer foreign exchange remittance services. However, nowadays non-bank online providers are now allowed to send $50,000 per year and $5,000 per transaction.
Main market players: Utransfer, Western Union, TransferWise, MoneyGram, etc.)
Cryptocurrency policy
Cryptocurrencies are not considered as a legal tender, and exchanges, while legal, are part of a closely-monitored regulatory system (must be registered with Financial Supervisory Service). Main crypto exchanges in S.Korea are Upbit, Bithumb, Korbit, Coinone, Gopax, Huobi Korea, etc. While the blockchain as a technology is supported in S.Korea and Korean major technological company develop their blockchain arms, for example, Ground X of Kakao. As well as the Seoul Metropolitan Government is planning to integrate blockchain applications into the core operating IT system. For instance, the government processed the letters on the ICON network via a mobile app. This use case is the first where the government utilized the blockchain for the processing of information in S.Korea. Also one of the last news that Busan has been declared a partial “regulation-free” zone for blockchain development by South Korea’s national government. Busan is becoming a centre for trading and finance as well as a hub for innovation, and it is the home of the Korea Exchange.
(Cryptocurrencies are not considered as a legal tender and exchanges. Main crypto exchanges in S.Korea are Upbit, Bithumb, Korbit, Coinone, Gopax, Huobi Korea, etc. Those legal are part of a closely-monitored regulatory system that must be registered with Financial Supervisory Service). The blockchain as a technology is supported in S.Korea and Korean major technology companies that develop their blockchain arms, for instance, Ground X of Kakao. Also, the Seoul Metropolitan Government is planning to integrate blockchain applications into the core operating IT system. The government processed the letters on the ICON network via a mobile app. This is the first where the government utilized the blockchain for the processing of information in S.Korea. For instance, one of the last news that Busan has been declared a partial “regulation-free” zone for blockchain development by South Korea’s national government. Busan is becoming a centre for trading and finance as well as a hub for innovation, and it is the home of the Korea Exchange.
Sticpay for South Korea
STICPAY offers a convenient local bank wire withdrawal payment method within 1–2 days, and our very own prepaid STIC card (partnership with UnionPay).
Source:
ICLG - Fintech 2020 | Laws and Regulations | Korea
Woori Bank - Resident's Remittance without Submitting Evidential Documents - Login
Korea Times - Mobile remittance allowed for foreign currency
TransferWise - ATMs In South Korea: Credit Cards And Fees
Sejong Dish - Remittance: How Can I Send Money Home From South Korea?
Korea 4 Expats - Credit Cards for Non-Koreans
Business Korea - Foreign Banks Leaving South Korea Due to Stronger Financial Regulations
Seoulz - Top 10 Korean Cryptocurrency Exchanges in 2020
Coindesk - South Korea Declares Partial 'Regulation-Free' Zone for Crypto Companies
Getting The Deal Through - Anti-Money Laundering - Work areas - Getting The Deal Through
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