This guide will walk you through the different aspects of sending and receiving money in South Korea, the factors to consider when sending money and why you should try out money transfer providers.
Sending money to Korea is simple and easy. Follow these steps to get started.
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 sending and receiving money.
There are three main remittance channels to South Korea. You can either 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.
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.
Many Koreans abroad use internet-based money transfer services such as OFX, Azimo, Xoom, TransferWise, and SodaTransferto 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 TransferWise 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.
Through online money transfers services, you can send money directly to bank accounts or cash pickup locations in Korea. 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.
Western Union and MoneyGram are the two biggest brands in the agent-based cash transfer channel. They also allow for internet-based money transfer. 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.
The information and documents you require when sending money to South Korea include:
Once you make your first transfer, you may not need some of this information on your subsequent transfers.
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. The cash sent arrives in minutes. Cash pickups are best 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. Some deposits may take a little longer and are usually subjected to bank operating hours and public holidays.
For cash pickups, you will need the following documents to collect your money.
The recipient may also be asked to confirm the details of the sender, the city they live in, their relationship and the purpose of the transfer.
The inflows to South Korea are driven by different needs. 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.
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. The median cost of buying a home in Seoul is USD 95,000.
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. The median cost of buying a home in Seoul is USD 95,000.
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.
Some of the investments are in new businesses while others are cash flow injections into existing businesses.
Overseas companies make payments to Korean-based suppliers, contractors, and employees.
During festivals and national holidays such as Seollal, Chuseok, and Buddha’s Birthday, inflows to South Korea increase. The contributions could for family-based celebrations or made directly to religious organisations or to the needy.
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:
There are several things that you need to think about as you send money to South Korea.
The South Korean Won (KRW) is a convertible currency controlled by the Bank of Korea among other institutions. Therefore, you can make your transfers in USD or KRW. As long as you follow the due processes, it is simpler to send and receive money in South Korea.
Sending money anywhere else in the world is as easy as sending money to Korea. 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