Fintech international money transfers from South Korea increase by more than 25 times

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Daniel Webber
Daniel Webber
Founder & CEO
Daniel is Founder and CEO of FXcompared and has 18 years of experience in the international finance world focusing on cross-border payments, technology and the property sectors. Daniel is widely… Read more
  • Fintech international money transfers for South Korea increased by 2,507% during the past year
  • Currently, 25 fintech firms provide small-sum international money transfer services in the country, up from just four in 2017
  • The most popular destinations for money transfers from South Korea were Nepal, the Philippines and Vietnam

 

The value of international money transfers processed by fintech companies in South Korea increased by more than 25 times during the past year, revealing that small-sum money transfers across borders have become increasingly popular.

South Korea's integrated financial regulator, the Financial Supervisory Service (FSS), reported that fintech companies processed small-sum money transfers worth $365m (£288) during the first quarter of this year, an increase of 2,507% from the $14m (£11m) worth of transfers they processed during the fourth quarter of 2017 when fintech companies first began to provide these services in South Korea.

The FSS calculated these figures by adding the value of all international money transfers made by fintech companies both to and from South Korea during that timeframe.

During that period, the FSS reported that the total number of small-sum money transfers increased to 550,000 from 22,000.

Currently, South Korea allows fintech companies to process cross-border payments that do not exceed a ceiling imposed by the financial regulator.

The regulator currently sets a limit of $3,000 (£2,371) for an individual transfer, with a maximum limit of $30,000 (£23,712) worth of transfers for an individual each year. However, the regulator plans to raise the respective limits to $5,000 (£3,952) and $50,000 (£39,520) by the end of this year.

Currently, the FSS reports that 25 fintech companies are providing small-sum international money transfer services in South Korea, an increase from only four firms in 2017.

By offering transaction fees that are significantly lower than those charged by traditional banks, fintech companies have been successful in growing their user base, which consists primarily of foreign students, foreign migrant workers and South Korean nationals who need to make international money transfers.

During the first quarter of 2019, the value of an individual international money transfer was $660 (£522), which was a 3.3% increase from $640 (£506) noted in the last quarter of 2017.

The average total value of international money transfers at each of the fintech companies in the first quarter of this year was $18m (£14.2m), with an average of 27,000 transactions. This amounted to an almost tenfold increase from the average per firm of $2m (£1.6m) in transfers and 3,000 transactions recorded in the fourth quarter of 2017.

According to the FSS, the most popular destinations for money transfers from South Korea were Nepal (24%), the Philippines (19%) and Vietnam (12%).

Looking towards the future, the FSS promised to increase the scrutinization received by fintech companies that provide cross-border money transfers to ensure that they comply with the country’s regulations and to increase the confidence that consumers have in the industry.

To keep up to date on international money transfers companies, visit our magazine section.


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