[단독]13 Asian countries tie up ‘payment, remittance, ATM’ networks… Significant expansion of the Financial Services Commission’s cross-border joint network

13 countries in Asia are tying up ‘payment, remittance, ATM’ networks… Significant expansion of the Financial Services Commission’s cross-border joint network

Published: 2024-10-17 13:55 Updated: 2024-10-17 14:06

Cross-border common network service concept diagram. 〈Image=Korea Financial Telecommunications and Clearings Institute〉

The threshold for remittances and payments between 13 Asian countries, including Korea, China, and Japan, will be greatly lowered. Construction of a ‘global payment network’ that will unite all of Asia has begun in earnest. Korean travelers will be able to withdraw cash from overseas local ATMs without any additional procedures, and QR payments at stores as well as real-time money transfers to local bank accounts are expected to become more seamless.

According to the industry on the 17th, the Korea Financial Telecommunications and Clearings Institute confirmed the linkage of the ‘international common network’ of 13 countries at the APN Forum held in Sri Lanka early this month.

The basis of the financial network is the Asian Payment Network (APN), in which major payment institutions in the Asian region participate. This consultative body, which promotes mutual cooperation across payment services in the Asia-Pacific region, currently consists of 14 organizations from 13 countries (2 in Indonesia), including the 3 Northeast Asian countries of Korea, China, and Japan, and 10 ASEAN (Association of Southeast Asian Nations) countries, including Indonesia, Singapore, and Australia. organization) is enrolled.

The Financial Services Commission agreed to promote interconnection of financial networks of each country’s payment institutions through this consultative body. Because it promotes country-to-country connection, it has a great advantage in terms of future service coverage and versatility compared to the method where individual banks build separate connection networks with local banks.

There are three main services: ATM, remittance, and payment. In the case of ATMs, domestic customers can withdraw local currency or check their account balance at overseas ATMs using their domestic cards. There are no international fees charged when using international brand cards such as Visa and Mastercard.

Using the existing method, consumers have to pay fees to three companies: domestic card companies, global card brands, and local ATM operators. Typically, large domestic credit card companies charge a fee of 3 USD per withdrawal and 1% of the amount used.

Even when paying with a card overseas, a fee is charged by both global card brands and domestic card companies, and there are many cases where a fee of 3 to 8% is charged in the process of exchanging local currency, Korean won, and dollars. If you go through the Financial Services Commission’s cross-border network, these unnecessary fees can be significantly reduced.

Korea Financial Telecommunications & Clearings Institute joined APN in 2010 and is currently providing cross-border ATM services to six countries: the United States, the Philippines, Vietnam, Thailand, and Indonesia, starting with Malaysia in December. The remittance service supports account (receipt)-based direct remittance to five banks in Vietnam and one bank in Thailand.

Currently, a structure of settling the difference through a country-specific payment bank is being adopted, and discussions are underway on various methods such as localized payment in the future. A structure of settling the difference in dollars was adopted through each country’s settlement bank.

An official from the Korea Financial Telecommunications and Clearings Institute explained, “Using participation in this forum as an opportunity, we plan to hasten the introduction of cross-border common network services in connection with APN member countries and sequentially expand the applicable countries.”

Reporter Hyungdu Lee [email protected]