Consumers to Get Exchanged Foreign Currencies Delivered
Consumers will be able to receive exchanged foreign currencies at home via parcel delivery service or at parking lots. Also, consumers will be allowed to withdraw money transferred from overseas via automated teller machine (ATM) at any time of the day.
Deputy Prime Minister and Finance Minister Hong Nam-ki announced on June 4 the measures for innovation in foreign exchange policy through increased convergence and contactless solutions at the innovative growth strategy meeting.
Plans for innovation in foreign exchange policy include enhancing convergence and contactless services, introducing measures to rapidly review regulations for new businesses and providing exemptions, promoting fair competition among foreign exchange service providers, and streamlining foreign exchange transaction processes and increasing the efficiency of supervision.
As for expanding convergence and contactless services, customers will be allowed to consign money exchange or remittance to a third party under the extent that such actions do not violate the anti-money laundering law or the real-name financial system. Under the eased rules, new type of services can emerge among service providers through cooperation such as sharing the remittance network.
Until now, customers had to visit currency exchange shops located within banks or airports to exchange foreign currencies. Now, channels through which customers can exchange foreign currencies have widened to include financial companies such as brokerages, insurers, airlines, duty-free shops, and parcel delivery companies. Customers will also be able to withdraw the exchanged money via ATM.
A remittance brokerage system will be introduced to provide more opportunities for small-sized remittance companies. With the newly introduced system, remittance companies that do not have any partner companies in countries to which the customer wishes to transfer money will be able to provide the service by sharing the network of other companies.
To help fintech companies easily exchange foreign currencies and transfer money, another form of transferring or exchanging money besides the traditional method of transferring money from an account to another account is allowed. Small-sum overseas remittance service will be available via ATM or at bank counters.
Moreover, when fintech companies start a new business, the government will check within 30 days whether the business is subject to regulations. If needed, deregulation will be applied across the industry. This process of speeding up the government review was applicable only to companies that applied to regulatory sandbox.
Competition among foreign exchange service providers such as banks and non-monetary institutions will be promoted. Foreign exchange transaction process will be much more streamlined to enable ‘foreign exchange by a third party’, through which a foreign investor can exchange currencies through securities companies instead of banks. As of now, foreign exchange process for foreign investors is handled by banks only after the foreign investor opens a bank account under his name and transfers the money to his account.
With the streamlined process, the foreign investor can simply transfer the money to his account created at a securities company where the money will be exchanged into a foreign currency. Securities companies and credit card companies can handle money transfers of small sum – up to US$5,000 per transaction and US$50,000 per customer annually. However, exceptions are made for cases in which a large amount of money can be transferred by small-sum remittance companies to overseas partner companies.
Foreign exchange transaction processes will be much more simplified as well. When a customer exchanges money to another currency for the first time, if the customer has reported the transaction in advance, simple changes in the customer’s profile such as the customer’s business name, customer’s name and address can be reported after the transaction has been made. The government plans to finish revising the enforcement decree of the Foreign Exchange Control Act and related regulations by this September.