Competition is intensifying in the overseas remittance service market from the beginning of the year.
The market has become more crowded with the participation of credit card companies, securities firms and fin-tech companies, which are all looking for a new lucrative business. On top of them, savings banks are set to advance into this market.
Market watchers say that the final winner in the overseas remittance market will emerge after the entry of savings banks in the second quarter of this year.
As of Jan. 24, there were about 20 overseas remittance service providers registered with the Financial Supervisory Service. Financial authorities opened the market to new players, including non-financial companies such as P2P lenders, in a bid to promote competition. Until last year, the market had been monopolized by banks and Internet-only banks (up to US$50,000 a year per customer). Beginning this year, credit card and securities companies can provide overseas remittance services for up to US$3,000 per time and $30,000 per year for each customer.
New players are swarming into the overseas remittance service market because its size is huge -- 14 trillion won a year. The Bank of Korea estimated the amount of money internationally remitted by individuals at 12.33 trillion won in 2017, a rise of more than two trillion won from 10.8 trillion won in 2016. The market is expected to continue to grow. The number of foreign workers in Korea increases by 90,000 every year. Money transfer by these workers ballooned from 1.66 trillion won in 2016 to 3.87 trillion won in 2017 and is estimated to have exceeded five trillion won in 2018.