The amount of international money transfers handled by South Korean fintech companies has grown more than 25 times over the past year, a testament to the growing popularity of cross-border small-fee money transfer services.
According to the Financial Supervisory Service, Korea processed $ 365 million in small-value money transfers in the first quarter of 2019, up 2,507% from the $ 14 million processed in the fourth quarter of 2017, when these services started to operate here.
This total figure is calculated by adding the value of all overseas money transfers made from Korea and vice versa during a given period.
During the cited period, the total number of money transfers increased from 22,000 to 550,000, according to the FSS.
Currently, Korea allows FinTech companies to handle cross-border money transfers as long as the amount does not exceed a cap.
The current limit is $ 3,000 per transfer up to a maximum of $ 30,000 in transfers per year. But legal changes are underway to increase that limit to $ 5,000 and $ 50,000, respectively, by the end of the year.
According to the market watchdog, 25 FinTech companies currently offer such money transfer services here, up from just four in August 2017.
By charging lower transaction fees than traditional banks, these companies have increased their user base consisting mainly of foreign migrant workers with remittance needs, foreign students, and locals with remittance needs. money abroad.
In the first quarter of this year, the average amount of money transfers per case – calculated by dividing the total dollar amount of all money transfers by the number of cases handled – was $ 660. It marked a 3.3% increase from the $ 640 recorded in the fourth quarter of 2017.
The average amount of money transfers facilitated per company was $ 18 million in transfers with 27,000 cases. This marked an almost ten-fold growth, from $ 2 million in transfers and 3,000 transfer cases.
As for the countries receiving the most remittances from Korea, the most popular destinations were Nepal (24%), the Philippines (19%) and Vietnam (12%), according to the FSS.
Going forward, the FSS is committed to stepping up its oversight of cross-border money transfer activities to ensure legal compliance while improving consumer convenience.