INTERVIEW Why is overseas remittance still challenging, costly in this global era?

Park Chang-heon, a leader of the platform business division of Hanpass, left, and Eun Seung-jo, a director of the remittance division, pose for The Korea Times during an interview at its headquarters in Seoul, Oct.12. Korea Times photo by Lee Yeon-woo

When working in a country where there's a language barrier, what aspects of daily life would be the most challenging? Many things come to mind, but a primary concern might be accessing financial services, especially if your main reason for being abroad is to send money to your family back in your home country.

"Even if you are fluent in English, communicating in countries where English isn't the primary language can be tough. Imagine meeting someone who speaks Korean fluently. You'd naturally feel inclined to engage in more conversation with them," Park Chang-heon, the platform business division leader of Hanpass, told The Korea Times in a recent interview at the company's Seoul headquarters.

"It's similar in financial services. We have dedicated employees for each of the 17 countries where we offer language services, handling everything from translation to localization."

Founded in 2017, Hanpass is a fintech company specializing in overseas remittance services to foreign nationals residing in Korea. With its competitive low commission rates and multilingual services, it now operates in over 200 countries.

After an amendment to the foreign exchange bill in 2018, the firm entered the market and has displayed consistent growth ever since. Last year, its operating profit reached 1.3 billion won ($961,894), and sales hit 24 billion won, marking a 23 percent increase from the previous year.

The company targets primarily foreign workers and international students in Korea.

"Even though international students might not have an immediate source of income, they possess the potential to secure jobs and engage in economic activities, marking them our prospective clients," Park said.

The overseas remittance market offers significant business opportunities, both domestically and internationally, according to Hanpass.

"Our society faces challenges from an aging population and a declining birthrate. As a response, the Korean government is promoting the idea of welcoming more foreign workers to address the workforce shortage. Given this context, the market is poised for sustained growth," Park said.

So, what are the benefits foreign workers gain from using fintech services like Hanpass over traditional banks? Hanpass believes the advantages lie in its lower commissions and its services tailored more to individual needs compared to those offered by local commercial banks.

For instance, Hanpass bypasses the SWIFT system, the standard network that banks use for secure communication. Instead, it establishes separate partnerships with financial institutions and corporations overseas. When a customer requests a remittance, Hanpass places an order with these partner entities, thus avoiding the associated fees and commissions from intermediary banks.

"I believe that despite their size, banks can't allocate sufficient resources specifically for foreign exchange or localization. Delivering a tailor-made service like ours, for instance providing support in 17 languages, can be daunting for them given their other ongoing business ventures," Eun Seung-jo, the director of the firm's remittance division, told The Korea Times.

Still, Korea has significant ground to cover in the overseas remittance sector, especially when benchmarked against the global market.

"Many entities in the global market, like Tencent and Alipay, dwarf us in scale. Their transaction volumes exceed ours, largely because the number of foreign workers they cater to is much higher compared to Korea," Eun noted.

Now, Hanpass is broadening its scope beyond remittance. The company is integrating services that cater to everyday needs, such as hotel bookings and flight ticket reservations, directly within its app. While similar platforms are available in Korea, foreign nationals often struggle with them due to language barriers.

"Our ultimate goal is to evolve into a 'super app,' akin to a Kakao for foreign nationals," Park said.