Internet-only banks such as K Bank, Toss Bank and KakaoBank are moving into the overseas remittance market, highlighting price, speed and user experience.

The government has unified the documentation-free overseas remittance limit at $100,000 across the financial industry from the start of the year to improve the efficiency of foreign exchange management, the financial sector said on Thursday. Previously, limits differed at $100,000 for banks and $50,000 for non-bank institutions, but the change has simplified the environment for individuals using overseas remittances.

The abolition of the designated transaction bank system is also stimulating competition. Previously, people sending $5,000 or more had to use only 1 bank, but the end of the system allows them to choose among multiple banks, greatly expanding consumer choice. That regulatory easing is driving internet-only banks to accelerate their push into overseas remittances.

Toss Bank recently launched its "Send and See Overseas Remittance" service, seeking differentiation as a latecomer.

It set its overseas remittance fee at 3,900 won, presenting what it called one of the lowest levels among banks, and also highlighted transfer speed. Transfers in EUR, SGD, GBP and HKD are designed to be deposited into the recipient's account within 1 hour, while USD, CAD and AUD are designed to arrive within up to 24 hours, or 1 to 2 business days.

It also strengthened transparency in the transfer process. Users can check the entire process in real time from applying for a transfer to the deposit into the recipient's account, and it provides advance guidance on the required remittance amount based on the amount to be received so that fee deductions do not lead to additional transfers. It presented user experience as a strategy beyond a simple transfer function.

K Bank strengthened price competitiveness and management features at the same time. It cut overseas account remittance (SWIFT, ACH) fees to a flat 4,000 won until June 30, lowering them to about half the previous U.S. remittance fee of 8,000 won.

It also provides a function that shows overseas remittance history and the amount available to remit at a glance, improving convenience. Users can separately check amounts sent from K Bank and total remittances through all financial companies, and can also search by status such as in progress, completed, cancelled or returned. Users can register up to 30 recipients, making repeat transfers more convenient.

KakaoBank is continuing to differentiate with fee waivers for recipients and cumulative management features. After cutting its fee for sending overseas account remittances to a flat 4,900 won in July last year, it fully waived fees for receiving overseas remittances without conditions from October that year. KakaoBank is currently the only domestic bank to fully waive overseas remittance receiving fees. It also tallies cumulative overseas remittances and allows users to manage amounts sent through other financial companies as well, helping prevent exceeding the annual documentation-free limit of $100,000.

A common strategy among internet-only banks is "user experience". They are using services that emphasize fees, speed and visibility to view overseas remittances not as a simple financial function but as an opportunity to expand their platforms. That is because customers who use overseas remittances are likely to move on to related services such as foreign currency accounts and overseas investment.

Commercial banks, meanwhile, maintain traditional branch-based structures and take a relatively conservative approach, applying differentiated overseas remittance fees by amount. That has created a wide gap with internet-only banks.

The size of the overseas remittance market rose each year to $3.117 billion in 2022, $3.415 billion in 2023 and $3.454 billion in 2024, according to the Bank of Korea. As fintech companies also enter the overseas remittance market, the competitive landscape is expected to become more complex.

A financial industry official said remittance speed, management features and convenience in the usage process will become the key criteria that determine overseas remittance service choices as fee differences have nearly disappeared.