The number of international money transfers handled by fintech providers in South Korea has grown 2,500 percent in little over a year, the country’s financial regulator has said.
The fintech payments revolution is touching all corners of the world, and in one of those corners sits South Korea — a popular home for Filipino, Nepalese and Vietnamese foreign workers who collectively send billions each year to their families back home.
As in other parts of the world, these workers are abandoning banks and traditional remittance channels at an alarming rate in favour of the fintechs, which have been granted licenses in South Korea since August 2017.
Despite restrictions that prevent fintechs properly competing in South Korea’s payments industry, the country’s Financial Supervisory Service detailed this week a 2,507 percent increase in fintech transaction volumes over a 15-month period: it said that Korea processed $365 million worth of transfers in the March quarter, up from $14 million handled in the December quarter of 2017, with 550,000 transfers being authorized, up from 22,000.
The aforementioned restriction is one that limits overseas money transfers by non-banks to a maximum of $3,000, but as in Japan, where a longstanding cap is being abolished, the FSS is making changes, and the first of these should come later this year when it increases the transfer limit to $5,000.
Progress is being made in Asia but clearly the trust of regulators still needs to be won before these innovative firms can compete with banks on a level playing field.