The Republic of Korea receives over $6 billion in remittances. The USA, Japan, China, Canada, and Australia are the top countries whose combined remittance makes up close to 90% of South Korea’s inflows.
South Korea has one of the most highly skilled workforces globally, especially in technical areas. Combined with high research and development capabilities, most South Korean’s have found employment opportunities in countries across Asia, Europe, and North America.
Whereas some of the Koreans migrate with their families, others leave them behind. Periodically, Koreans abroad send money to their families for upkeep, business investment and savings. If you are a Korean national considering sending money to your family or friends back home, it is important that you understand the proper and efficient ways of sending and receiving money in the country.
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.
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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.
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.
Inflows play a key role in supplementing household income. Some migrant households are totally dependent on diaspora remittances for survival.
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.
Western Union’s fast option is the fastest way to send money online. With Western Union’s fast option, your money should reach its destination in a matter of minutes. The service is also among the most ubiquitous in the money transfer industry.
The only downside to using Western Union is that it is very expensive, regardless of whether you’re choosing their fast option or not.
The cheapest option to transfer money is through OFX. OFX charges a small currency conversion fee that depends on the amount of money being transferred. The more money you send through OFX, the better the deal is. On the lower end, OFX takes 1% of the transfer. However, as you send more money, this rate declines to the eventual lowest possible rate of 0.4%. The only catch is that OFX does carry a minimum transfer amount.
If the current minimum transfer amount is too high for you, TransferWise is usually as cheap as OFX for smaller transactions.
The easiest option to send money online to Korea is through TransferWise. TransferWise makes sending money to Korea exceptionally easy. All you need to do is follow these simple steps:
The current exchange rate for the South Korean Won (KRW) is 1,161.4604 KRW per American Dollar (USD) as of the time this was written. The KRW reached a high of 1,190.4599 KRW per USD and a low of 1,154.7501 KRW per USD during the last 90 days. The average exchange rate over the last 90 days was 1,154.7501 KRW per USD.
The average volatility rate of the KRW against the USD was 0.3% over the last 90 days. This is a normal/moderate volatility rate, and the KRW has been behaving this way for some time now. Going forward, you can reasonably expect moderate fluctuations to continue, barring any unforeseen circumstances.
OFX is the overall best way for money transfer to Korea. While OFX does carry a minimum transfer amount, the amount is not very high for a country like South Korea. In fact, when it comes to costs, you simply won’t get a better deal than the one you will get from OFX.
OFX is also a fairly simple platform to use, making it well-rounded. For these reasons, OFX is the overall best way to send cash online to South Korea.
What do we mean by the top provider?
The top provider is the money transfer service that we believe is the most suitable for the country you’re sending money to. In order to keep our service free we factor in the commercial agreements we have with partners into this ranking.
How do we choose providers to display?
We make sure that each table displays the most relevant brands to the country you are sending money to and from. We consider many factors when choosing the providers to display in the table.All of the providers we display are fully regulated to provide money transfer services in the jurisdiction you are searching, relevant regulatory authorities are the FCA, ASIC, Fincen, FINTRAC & AMF. Alongside being regulated the services are manually checked by our team for both quality of service and online trust from such platforms like Trustpilot and Google reviews.We base our rankings primarily on the quality of the service provided, the benefit to the consumer and to keep our service free - the commercial agreements we have.
How do we order our comparisons?
We are affiliated with some of the partners displayed in the tables. However, the order of the providers is based on the quality of the service for the particular country corridor followed by the commercial agreement in place. You don’t pay any extra and the deal you get isn’t affected by our commercial agreement with the money transfer provider. We may receive a commission when you click through to a listing or when you make a transaction.We aim to find the balance between the quality of the service, customer satisfaction and the commercial agreements we have, and continue comparing services in a transparent way.If you have any questions about our listings, please don’t hesitate to email us at firstname.lastname@example.org
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.