By Choi Kyong-ae
The government will ease regulations involving foreign exchange transactions in an initial step to help the financial industry, the finance ministry said Monday.
“We need a drastic change to existing foreign-exchange regulations as foreign exchange transactions between individuals, businesses and financial institutions have sharply increased since 1999,” an official at the Ministry of Strategy and Finance said.
Compared to 1999, foreign exchange deals jumped by 6.6 percent. The number of Koreans’ overseas remittances soared to more than 10 million, said the ministry.
In major changes, individual customers will be allowed to transfer money to their families or relatives through domestic mobile messaging applications such as Kakao Talk and LINE, as well as apps such as PayPal in the U.S. and Alipay in China, the statement said.
“Even if their overseas remittances exceed $50,000 a year or $20,000 a day, they don’t need to submit documents to show the details to the financial authorities,” it said.
As eased regulations will allow domestic payment gateway (PG) operators to offer foreign exchange services in line with surging overseas direct purchases.
Korean customers have to rely on foreign e-payment systems for settlements of purchases of products via foreign online stores, as the PG operators are not licensed to handle foreign exchange businesses.
For example, if a Korean PG operator makes business ties with Alipay, Chinese customers also make a settlement through Alipay for their purchases at Korean online shopping malls, the statement said.
In fact, Chinese customers have been only allowed to pay for their purchases at Korea’s large online shopping malls which have partnered with Alipay operated by Alibaba, China’s biggest e-commerce company.
As for companies, they do not have to report their foreign-exchange transactions in advance to the authorities. The move will help companies make an investment in potential markets without wasting time, it said.