Kim Seung-hwan, Toss Bank's product owner of foreign exchange and overseas payment services, speaks during a press conference at Dongdaemun Design Plaza in Seoul, Thursday. Courtesy of Toss Bank
Toss Bank launched a commission-free foreign exchange service on Thursday, which does not charge any fees when buying or selling currencies. The internet-only bank said it was the first domestic financial company to introduce the entirely free foreign exchange service.
Under the slogan of "Free Exchange for Life with All the World's Money," the bank's foreign exchange service allows customers to exchange 17 different currencies in real time, 24 hours a day and seven days a week.
"Toss Bank aims to revolutionize the foreign exchange service market by eliminating the opaque system of foreign exchange commission fees," Kim Seung-hwan, the bank's product owner leading foreign exchange and overseas payment services, said during a press conference at Dongdaemun Design Plaza in Seoul on Thursday.
He emphasized that Toss Bank's zero percent commission for its foreign exchange service completely differentiates itself from other banks. He explained that foreign exchange commission fees charged at other local banks vary from 1.5 percent to 13.1 percent, as of early this week, while the fees charged at airports range from 4.2 percent to 18.5 percent.
"We believe Toss Bank can innovate the foreign exchange market by offering a lifetime of free currency exchange. This means providing the same exchange rate when both buying and selling foreign currencies. Typically, it is common for banks to charge additional fees, especially when selling, but Toss is committed to providing the commission-free service for all trading," Kim said.
Toss Bank CEO Hong Min-taek, right, and Kim Seung-hwan, center, Toss Bank's product owner of foreign exchange and overseas payment services, sit next to each other during a press conference at Dongdaemun Design Plaza in Seoul, Thursday. Korea Times photo by Anna J. Park
During a Q&A session that followed Kim's presentation, Toss Bank CEO Hong Min-taek expressed hope that the digital bank's lifetime of free foreign exchange services can contribute to a freer exchange of money across borders.
"As the opaque system of foreign exchange commission fees generally comes as a barrier to most financial consumers, people tend to avoid taking proactive stances on foreign exchange markets. As a result, individuals miss chances of potentially benefitting from earning profits by trading foreign currencies. With an increase in transactions allowing more people to exchange the Korean won and foreign currencies, there may be greater freedom in the movement of money among countries," the bank's CEO said.
With regard to how the bank maintains the commission-free foreign exchange service, the bank said its sustainable profit structure allows customers to use the foreign exchange service for free.
Once customers create a foreign exchange account at Toss Bank, they can make payments or withdrawals overseas using Toss Bank's debit card.
As for the overseas remittance service, the internet-only bank said it is still conducting research, aiming to find innovative solutions to many current challenges related to the speed and reliability of remittance as well as other factors.