What comes to mind when you think of “South Korea”? You would probably think of K-Pop stars like BTS and BLACKPINK, Korean dramas on streaming platforms like Netflix and Viu, and more.
With South Korea’s cultural economy becoming more popular around the world, it is an incredibly lucrative opportunity for online sellers, retailers and businesses. Consumers are not only interested in K-Pop and K-Drama merchandise, but also the fashion and beauty products that their idols promote.
Aside from that, South Korea is a popular importer for electrical equipment, mineral fuels (e.g. oil), computers and other machinery, vehicles, medical apparatus and more.
When it comes to making business transfers, banks remain the common way to make cross-border business payments to South Korea. However, limitations exist. Banks tend to provide favourable rates to high-volume transactions and require a lot of documents and paperwork before setting up an account. This can become cumbersome and leave many enterprises underserved.
In this article, we share more about South Korean Won (KRW) and its common international payments challenges, as well as how we make it easier for you.
South Korean Won (KRW) As An Exotic Currency
South Korean Won (KRW) is an exotic currency. Forex markets across the globe group currencies into three categories: major, minor, and exotic currencies. This classification is based on how well they trade in the currency market.
Exotic currencies, like South Korean Won, are those that are traded thinly or at low volumes. They are illiquid and tend to lack market depth.
Trading at low volumes does not necessarily mean weak or undervalued currencies. It simply means they don’t show a popular behaviour in the trading market and are available in very limited volumes.
As exotic currencies are not widely used, there tends to be a lack of information and understanding about what it means to do business in South Korean Won. It is important to better understand the currency and its transfer before making further business decisions.
Common Challenges When Making Payments In KRW
These are the typical challenges associated with KRW:
- Limited Volume Cause High Fees
As an exotic currency, KRW sees lower trading volumes compared to major currencies. As a result, banks and payment platforms typically use SWIFT and that incurs more service fees to the transactions without much transparency. This makes the eventual payment more expensive.
- Delay of Payments
If the provider does not have a direct payment partner in South Korea, it takes longer to make a payment because the transfer route is more complex.
- Volatility Makes It Risky
Using leverage, KRW can increase profits. However, due to its volatility, it can also create huge losses.
It is fundamental therefore to employ the services of a provider with proven delivery experience in this currency.
- Up to 10x cheaper on fees
- An alternative to SWIFT, we connect with local partners to make your payments faster and within the same day
- Our advanced risk management tools help you hedge risks and lock rates for up to 24 hours before committing the transaction
- Payments are encrypted end-to-end to ensure security
How To Transfer Money To A Korean Bank Account
Follow the steps below to start sending money to South Korea through Wallex:
Step 1: Open a Wallex account for free
Signing up is 100% free with no maintenance fees or hidden charges.
Step 2: Add your beneficiaries and start transacting
Once your account is activated, you can add your beneficiaries and set up your FX payment online.
Step 3: Track payments
Wallex offers complete transparency and you can keep track of your KRW payment on Wallex's platform.
How long does it take to send money to South Korea?
Through local transfers in South Korean Won, you can now send money to South Korea on the same day.
You can keep track of your KRW payment on Wallex's platform, and our dedicated Account Managers will keep you updated in case of any delays.
How much does it cost to send money to South Korea?
You can check the indicative rate for setting up a payment below.
Here’s why Wallex is the best solution for your business to make payments in KRW:
- Full transparency of FX rates, fees and status
- Assurance that your funds will be delivered on time
- All transactions can be done online
- Faster transfer and turnaround time
- Dedicated account manager to directly help you with any enquiries
Wallex can provide the lowest rates and highest payment limit for KRW among payment providers.
Talk to us. Visit www.wallex.asia to schedule a demo.