Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
Airport currency business becomes money-losing venture amid growth of app-based services
Travelers exchange money at KB Kookmin Bank's Incheon International Airport branch, April 9. Yonhap
By Yi Whan-woo
Despite spending billions of won in the bidding process, commercial banks are now seeing foreign currency exchange services at Incheon International Airport turn into a losing business, as these services are rapidly being replaced by hassle-free smartphone apps.
Still, the banks can’t easily withdraw, as they’re locked into 10-year contracts (2024–2034) to provide currency exchange services at the country’s main gateway, awarded through a bidding process in 2023.
“Once regarded as a goose laying golden eggs, the money exchange business at the airport has become a white elephant for the banks that are not keeping up with fast-changing business trends,” a market observer said, Sunday, asking not to be named.
He noted that in the past, travelers were willing to exchange money at international airports despite higher-than-usual commission fees if they urgently needed foreign currency and were in a hurry to catch their flight abroad.
As a result, banks viewed Incheon International Airport as a lucrative opportunity and competed fiercely every 10 year cycle for selecting currency exchange service providers.
Three companies currently hold the business rights for 2024–34: KB Kookmin Bank, Woori Bank, and Hana Bank. When they won the bid in 2023, they offered annual payments of 70.9 billion won ($51.8 million), 57.5 billion won and 45.9 billion won, respectively.
However, app-based currency exchange services have become increasingly popular among travelers since Hana Bank introduced Travelog in 2022.
Travelog is a debit card that allows users to buy and sell foreign currencies with zero commission fees through a linked app.
“It was so successful that the number of travelers who exchange money at the airport fell drastically,” another market observer said, noting that the current figure is estimated to be only about one-fifth of what it used to be.
While KB Kookmin Bank and Woori Bank released similar cards and benefits, they were not as successful as Hana Bank.
They subsequently chalked up massive losses in yearly foreign exchange-related earnings, burdened by the high costs of maintaining currency exchange services at the airport.
KB Kookmin Bank posted a net loss of 343.8 billion won in 2024, a steep fall after reporting a net income of 128.2 billion won in 2023.
During the same period, Woori Bank recorded a net loss of 1.03 trillion won, after reaping a net income of 95.2 billion won.
Hana Bank, meanwhile, successfully offset losses from airport money exchange with its Travelog service. Its net income rose accordingly, from 325 billion won in 2023 to 415.5 billion won in 2024.
“Just two years after Travelog, currency exchange services at the airport have become good for nothing,” another market observer said.
He noted that Shinhan Bank, which lost the 2023 bid for airport money exchange services, saw its net income related to foreign exchange rise from 88.8 billion won in 2023 to 138.6 billion won in 2024.