An increasing number of credit card issuers are entering the overseas remittance service market as part of their efforts to grab new business opportunities.
KB Kookmin Card Co. selected a software developer in August to establish foreign remittance service channels. The firm will start offering the overseas remittance service via a mobile app as early as the end of this year. It is planning to use the real-time wire transfer method through payment networks of global leading card brands such as UnionPay and Visa Card.
KB Kookmin Card can cut down the costs of launching the new service by making use of existing networks rather than building a new one. This has allowed the company to set the fees for its new service at the 10 percent level of those collected by banks for transferring money overseas using the SWIFT system.
Shinhan Card Co. is also accelerating construction of the international wire transfer service.
In April, the company’s remittance service based on credit cards was designated as “Innovative Financial Services” for the Financial Services Commission's (FSC) regulatory sandbox. After the selection, it has been in preparation to start the trial service from as early as October. Shinhan Card aims to officially launch the wire transfer service in January next year.
Hyundai Card Co. has joined hands with Shinhan Bank and fintech firm Currency Cloud Ltd. to offer the international wire transfer service from April last year. The company has set the wiring commission at 3,000 won (US$2.51), almost one-tenth of the industry average at conventional banks. To this end, the card issuer uses the pulling method which gathers several remittance requests and process them at once to allow customers to share the commission.
In addition, Lotte Card Co. has recently decided to push into the foreign remittance service market and it is working on it. Woori Card Co. and KEB Hana Card Co. are also considering the launch of the overseas money transfer service.
Credit card companies are aggressively entering the market because they are allowed to conduct foreign remittance service business starting from this year. The limit of overseas money transfers and collections by credit card issuers has also increased from US$3,000 (3.59 million won) to US$5,000 (5.98 million won) at a time. The year to date limits have raised from US$30,000 (35.85 million won) to US$50,000 (59.75 million won) as well.