By Yoon Ja-young
Fintech services like Kakao will be allowed to provide foreign exchange services independently without relying on banks.
The Ministry of Strategy and Finance announced Tuesday that it was going to submit revisions to the Foreign Exchange Transaction Act to the National Assembly in September to enhance convenience in making transactions.
Most notable of the revisions is that non-financial companies will be allowed to provide foreign exchange services independently.
Currently, fintech companies and non-bank financial firms are allowed to engage in small-sum foreign exchange services, such as remittance of less than $20,000 annually per customer.
The government started opening the doors for them in March in expectations that it will reduce fees as well as eliminate remittances through illegal channels. However, currently they need to be in partnership with local banks to provide such services. With the revision, they will be able to offer the services independently.
The revision will also ease foreign exchange transactions for individual customers. Currently, a customer is exempted from submitting a related document to a bank for small-sum foreign exchange transactions, less than $2,000 each and below $50,000 in total annually. The government plans to raise the ceiling to exempt more transactions from document submission. The detailed guidelines, however, will be determined later, according to the ministry of finance.
"If the revision is approved by the National Assembly, individuals as well as businesses will be able to engage in foreign exchange transactions more conveniently," said Lee Hyeong-ryeol, an official in charge of foreign exchange regulations at the ministry. "As non-financial companies such as fintech firms will also be offering foreign exchange services, customers will be able to cut their costs such as remittance fees," he added.
The government also plans to ease the regulations on the purchase of real estate overseas. Currently, buyers must get approval for their transactions from their banks or from the central bank for their purchases, but they will only need to report the purchase after the revision to the regulation.
Fintech services like Kakao will be allowed to provide foreign exchange services independently without relying on banks.
The Ministry of Strategy and Finance announced Tuesday that it was going to submit revisions to the Foreign Exchange Transaction Act to the National Assembly in September to enhance convenience in making transactions.
Most notable of the revisions is that non-financial companies will be allowed to provide foreign exchange services independently.
Currently, fintech companies and non-bank financial firms are allowed to engage in small-sum foreign exchange services, such as remittance of less than $20,000 annually per customer.
The government started opening the doors for them in March in expectations that it will reduce fees as well as eliminate remittances through illegal channels. However, currently they need to be in partnership with local banks to provide such services. With the revision, they will be able to offer the services independently.
The revision will also ease foreign exchange transactions for individual customers. Currently, a customer is exempted from submitting a related document to a bank for small-sum foreign exchange transactions, less than $2,000 each and below $50,000 in total annually. The government plans to raise the ceiling to exempt more transactions from document submission. The detailed guidelines, however, will be determined later, according to the ministry of finance.
"If the revision is approved by the National Assembly, individuals as well as businesses will be able to engage in foreign exchange transactions more conveniently," said Lee Hyeong-ryeol, an official in charge of foreign exchange regulations at the ministry. "As non-financial companies such as fintech firms will also be offering foreign exchange services, customers will be able to cut their costs such as remittance fees," he added.
The government also plans to ease the regulations on the purchase of real estate overseas. Currently, buyers must get approval for their transactions from their banks or from the central bank for their purchases, but they will only need to report the purchase after the revision to the regulation.
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