Toss Offers Free Transactions Amid Growing Competition Among Online Banks
Toss decided to eliminate transfer fees (Viva Repbulica)
Viva Republica, South Korea’s leading financial technology company, said on Monday it would eliminate transaction fees for Toss users, as it braces for growing competition with internet-only banks and others. financial technology companies.
The Toss app, which manages up to 2 million won ($ 1,730) at any one time, previously charged 500 won for each money transfer after providing the first 10 free transfers. But starting Monday, Toss users can transfer money at no cost.
The move comes as the fintech company prepares to launch Toss Bank, the country’s third-largest internet bank after KakaoBank and K bank, next month.
“We want to make a fundamental difference from other financial platforms by completely removing psychological barriers for financial consumers in their most frequently used area – remittances – to maximize satisfaction,” said Lee Seung-gun, founder and CEO of Viva Republica, adding that the company’s conclusion was made despite the apparent financial losses associated with the free trade regime.
Company executives have refused to reveal the extent of the financial burden the company will face, but industry sources have speculated it will amount to more than one billion won. The cumulative amount of remittances through Toss has reached about 169 trillion won since the company was founded in 2015. A Toss executive said that about 30% of money transfer users use the service over 10 times a month.
An industry executive said the Toss move is inevitable as other internet-only banks attract customers with free transaction fees and local banks offer no fees for their loyal customers.
“(Toss’s decision) was expected because most customers can now take advantage of free transactions from a variety of platforms, including fintech platforms and their major banks. Also, internet-only banks already offer free transaction fees, so I expected Toss to take that step sooner or later, ”a banking expert said on condition of anonymity.
The size of the country’s simple remittance market is growing rapidly. Total simple remittances in 2020 were 130 trillion won, an average of 356.5 billion won per day, 52% more than the 234.6 billion won in 2019, according to the reports. Bank of Korea data. Of the total remittances in 2020, 92% were made by fintech companies like Toss and Kakao Pay.
By Park Ga-young (firstname.lastname@example.org)