Send Money To South Korea
There are many ways to send money to South Korea, and finding the best deal can be time-consuming. In this guide, we share the best ways of sending to South Korea. It will allow you to save money, reduce transfer time and get the best FX rates. Also, we share the top methods for receiving money in South Korea. Throughout the guide, we provide the top money transfer services that are an excellent alternative to banks.
Understanding the economy of South Korea
South Korea is a beautiful country with a flourishing mixed economy and the 4th highest GDP in Asia. Over the last few decades, South Korea has developed from a nation dealing with immense poverty to a high-performing G-20 country with booming financial and technology sectors. The fast-growing development of South Korea has meant the nation’s international remittance market has increased rapidly, and this guide endeavors to provide information about the most competitive ways to send money to the country.
The national currency is the South Korean won, and at the time of writing, 1 KRW is equal to 0.00081 USD. The national GDP is $1.80 trillion, and the export economy is $645 billion in size. The primary industries in South Korea include Electronics, Telecommunications, automobile production, chemicals, shipbuilding, and steel.
Overall, the economy of South Korea has a good economic relationship with many countries. This means most money transfer companies include South Korea in their global coverage.
How To Send Money To Korea
Sending money to Korea is simple and easy. Follow these steps to get started.
Find a Trusted Provider
Register with your chosen provider
Transfer Money
Ways To Send And Receive Money In Korea
There are multiple ways to easily send and receive money in Korea, but these will largely depend on the provider you decide to use. Below you will find everything you need to know about the best ways to send money to South Korea.
Ways to Send Money to South Korea
There are three main remittance channels to South Korea. You can use banks, online money transfer providers, or in-person cash transfer services. The choice of the channel depends on the cost, accessibility, reliability, and transparency.
Bank to Bank transfers
If you are making your transfer from the United States, it may be worth it to consider Korean American banks. These banks, which include Bank of Hope, CBB Bank, Hanmi Bank, Metro City Bank, Open Bank, and Pacific City Bank, are dedicated to the needs of Koreans living abroad.
The cost of wire transfers averages 30-$40 per transfer, even when sending large amounts. The effectiveness of wire transfer services to Korea depends on the extensiveness of the foreign correspondent bank network of the financial institution you choose. Some banks, such as Wells Fargo, cover a handful of countries; hence may not be appropriate when sending money to Korea.
Generally, banks are not suitable for smaller and urgent transfers. For that, you’ll have to explore other options, such as online money transfer providers.
Online Money Transfer Services
Many Koreans abroad use internet-based money transfer services such as OFX, Xoom, Wise, and SodaTransfer to send money home. Online money transfer providers charge low fees, deliver transfers fast, give you the ability to track your transfer, and offer relatively higher exchange rates.
Transfer providers such as Wise and SodaTransfer do not charge any markup fee on the exchange rate. The transfers are done at mid-market rates. Even for those that charge markup fees, their margins are between 0.5-3.5%. These margins are way lower compared to the 5-8% that banks charge.
You can send money directly to bank accounts or cash pickup locations in Korea through online money transfers services. The good news is that you do not need to have a bank account in the host country to use the service. All you need is to set up an account, have it verified, fill in the transfer details, pay for your transfer and send.
Paying for your transfer is simple; you can do bank transfers or pay using your credit or debit card.
In-Person Cash Transfer Services
Western Union and MoneyGram are the two biggest brands in the agent-based cash transfer channel. They also allow for internet-based money transfers. These two money transfer operators have agents located in different parts of the world, including banks, independent stores, and self-service counters.
The fees you’ll pay when using this channel comprise the transfer payment method fee and the exchange rate margin. For instance, when transferring money from the UK to South Korea, Western Union allows up to a maximum of 5,208.18 GBP at a fee of 85 GBP. MoneyGram charges a fee of 3.99 GBP. While both operators transfer in USD, MoneyGram has a better exchange rate than Western Union. The available payout option is a cash pickup.
What is Needed to Send Money to South Korea
The information and documents you require when sending money to South Korea include:
- A government-issued photo ID
- The name of the recipient, their address, and phone number
- The recipient’s bank details if the transfer is to a bank account
- The reason for sending
Once you make your first transfer, you may not need some of this information on your subsequent transfers.
What are the Ways of Receiving Money in South Korea?
Recipients in South Korea have two main ways of receiving money sent to them.
Cash Pickup: Providers such as Western Union and MoneyGram have pickup locations in South Korea that your family and friends can get their cash from. Cash pickups are suited for small amounts of money. Some cash pickup locations are bank branches.
Bank Deposits: Recipients can opt for transfers directly into their bank accounts. All major banks in South Korea provide direct deposit services from South Koreans in the diaspora. However, some deposits may take a little longer and are usually subjected to bank operating hours and public holidays. Take a look at our direct deposit vs. wire transfer guide if you’d like to know more about making direct deposits.
Money transfer services: the convenience of money transfer services allow you to receive cash in various ways. For example, you can receive a balance transfer using Wise and choose from several payout options. This includes bank transfer and ATM cash withdrawal.
Money transfer services provide lower fees than banks and can match the mid-market rate. This allows you to reduce the cost of sending money to South Korea.
Mobile app: it is possible to do all your international money transfer activities using a mobile app. You will need to visit the App Store or Google Play to see the available app for money transfer service. Check the app’s rating and features to ensure that international money transfer is among them. Mobile apps come with strong log-in security features such as PIN, biometrics, fingerprint, and 2-factor authentication.
Home delivery: you can receive home delivery in South Korea from money transfer services. This is handy for customers that do not have a bank account or time to visit a cash pick-up point. There is a charge for the service, and the time taken varies based on local demand. Also, you can receive funds in various currencies, and the choice is based on what company you have chosen.
What is Required to Receive Money in South Korea?
You will need the following documents to collect your money for cash pickups.
- South Korean passport, National ID card, driving license, or foreign passport
- The transaction number
The recipient may also be asked to confirm the sender’s details, the city they live in, their relationship, and the purpose of the transfer.
Common Reasons for Sending Money to South Korea
Different needs drive the inflows to South Korea. As a result, the amounts sent vary in size, frequency, and the source country. Below are some of the common reasons remittances keep on flowing to South Korea.
House Purchase
In highly speculative zones such as the capital Seoul, Gwacheon, and Sejong City, real estate assets attract a mixture of diaspora and local South Koreans. For example, the median cost of buying a home in Seoul is USD 95,000.
Paying for a Luxury Holiday
People planning to go for a holiday in South Korea send money in advance to booking companies or direct to hotels in the country. These payments are captured as inflows.
Business Investment
Some of the investments are in new businesses, while others are cash flow injections into existing businesses.
Cross-border Transactions
Overseas companies make payments to Korean-based suppliers, contractors, and employees.
Contributions for Religious Festivals
During festivals and national holidays such as Seollal, Chuseok, and Buddha’s Birthday, inflows to South Korea increase. The contributions could be for family-based celebrations or made directly to religious organizations or to the needy.
Why Send Money with a Money Transfer Service?
Money transfer services are the most preferred channels for sending money to South Korea because of the unique advantages they offer. Some of the top reasons for using money transfer service providers include:
Easy to Set Up
Faster Transfers
Higher Exchange Rates
Low Transfer Fees
Multicurrency Support
Security and Reliability
Things to consider when sending money to South Korea
Those sending money to South Korea could arrange an international transfer for all manner of reasons. We recommend considering the following before initiating a cross-border payment to this Asian country:
- Strict taxation may apply to larger transfers: South Korea implements extensive tax regulations, particularly regarding inheritance and monetary gifts. Therefore, recipients of large remittances should report these as gifted, as per the South Korean tax laws. If you are unsure about the status of an international payment, we encourage you to seek the advice of a tax professional who specializes in South Korean taxation.
- Emergency remittances: If you find yourself in a position whereby funds need to be urgently transferred to a contact in South Korea, we encourage you to make this clear to the service provider ahead of sending. Although slightly more expensive, the financial service industry can now offer instant payments, but it is crucial you make this request known before you pay for it to bypass any untimely obstacles or issues with transferring funds.
- Currency clarification: As the South Korean won (KRW) is not as readily available as other countries’ currencies, certain service providers or banks may offer to send money to South Korea, but they do not necessarily provide this service in KRW. For example, if you use your US-based bank to transfer funds to South Korea without reading the small print, you may discover the transfer is made quickly, but your payee ends up receiving USD instead of KRW. This is likely to inconvenience your payee in the long run as they will need to convert the funds into their local currency at their expense.
Top 3 companies for sending money to South Korea
It can be time-consuming to select a top-tier company to send money to South Korea. However, the three companies below are good choices and come with several advantages.
1. OFX
Sending money to South Korea with OFX is fast and safe. Their security measures are modern and easy to set up. Also, the low fees and competitive FX rates are way better than what most banks can offer. Because OFX has lower overheads, the savings can be passed down to the customer.
OFX provides a diverse range of payment options, which offers flexibility. Having access to different payment methods gives users a choice and provides backup options. Also, you can compare the fees between them to discover the one that offers the best deal.
2. Wise
Wise is an industry-leading money transfer service that has excellent transparency. They inform users of the fees and FX rates before transactions take place. Also, multiple confirmation screens guide customers through the process of sending money in a way that minimizes mistakes. Wise regularly matches the mid-market rate for many currency pairs, which most banks do not offer.
Balance transfer with Wise, in most cases, takes just a few seconds. They also do a great job of sending notification emails to keep both parties informed about the transaction.
3. Instarem
Instarem is a well-respected specialist transfer provider in South Korea. You can check the exchange rate for many currency pairs on the homepage. This gives you a chance to discover if Instarem provides a good deal before registering for an account.
The 24/7 customer service department of Instarem is a good source of help. They respond fast with live agents via chat. Also, an InstaPoints reward program offers customers an extra incentive to send money with Instarem.
Your Questions Answered
Looking to Send Money Somewhere Else?
Sending money anywhere else in the world is as easy as sending money to Korea. So if you’re looking to send money to another country, here is the list of the most popular destinations.
Jonathan is the founder and editor of MoneyTransfers.com. Jonathan is highly experienced in the currency transfer market, having previously worked in the FX trading industry, alongside being an avid traveller. Using his knowledge he identified a need for transparency and further education to help people save money on their money transfers, leading to the creation of MoneyTransfers.com