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Foreigners locked out of internet-only Kakao Bank

Participants celebrate the launch of Kakao Bank at the "unveiling ceremony" in the Sevit FIC Convention in Seocho-gu, Seoul, on July 27. / Korea Times file

By Chyung Eun-ju

The internet–only Kakao Bank attracted over a million customers within five days of its launch, but foreigners living in Korea were stopped from registering.

Kakao Bank offers low overseas transfer fees, making it attractive to foreigners who regularly use international banking services. But around 2 million foreigners were locked out from registering because they could not receive a verification code.

"According to the FAQ section, foreigners can't use this app/bank because we wouldn't be able to receive a verification code on our phones," a foreigner's review on the Kakao Bank app said. "We have KOREAN phone numbers because we live in KOREA."

"It's extra frustrating because a 90 percent discount in overseas transfer fees would benefit us far more than anyone else, so why would they want to alienate us from their service?"

Another foreigner said: "I tried the verification process several times but failed. I have an alien registration card and no problems with other banks, but why can't I use Kakao Bank?"

The operator of Korea's largest mobile messaging service, Kakao Corp, launched the bank.

According to a Kakao spokesperson, it is not possible to use an alien registration card for identification under current guidelines. Passports are also an invalid form of identification because non face-to-face identity verification is not yet available in Korea.

But the Financial Services Committee said it is possible to confirm identity with a passport and that each financial institution would have to choose to do so.

However, a major commercial bank in Korea and the Financial Supervisory Service said passport verification is tricky because it isn't yet possible to confirm a passport's authenticity.

Kakao Bank received around 344 billion won ($306.6 million) in deposits and issued 323 billion won in loans since its July 27 launch, the spokesperson said.

Chyung Eun-ju

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