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FSC allows online account switching between 1st, 2nd-tier banks

A screencap of the Pay Info website (Korea Financial Telecommunications & Clearings Institute)
A screencap of the Pay Info website (Korea Financial Telecommunications & Clearings Institute)

South Korea’s financial regulator said Sunday it will allow customers to swap their online bank accounts among first- and second-tier financial institutions for handling monthly payments.

Starting Tuesday, those who wish to switch payment accounts can apply at the bank they wish to deal with or at the Pay Info website, run by the Korea Financial Telecommunications & Clearings Institute, Financial Services Commission officials said.

The service, launched in October 2015, simplified the process for customers who wanted to switch banks for the purposes of handling monthly automatic payments for utilities, insurance and other purposes. Previously, customers had to cancel every item separately.

But the system faced some criticism as customers could only choose institutions within the same business tier.

For instance, customers who held accounts at first-tier and major commercial banks here such as KB Kookmin, Shinhan, Woori and Hana were only allowed to switch to accounts with those four or around 10 others that were classified as first-tier. Internet-only banks such as K bank and Kakao Bank are also considered first-tier.

The updated system will now allow account switching between first- and second-tier financial firms including savings banks, the Korean Federation of Community Credit Cooperatives and NH NongHyup.

“We expect that this expanded service will improve user convenience and induce fair competition within the financial circles,” the FSC said in a release.

Following its launch in 2015, 2,338 account changes had taken place through the system as of December.

By Jung Min-kyung (