Korea sets up open interbank payment network to boost fintech

Available to nonbank players, the scheme aims to lower required usage costs.

South Korea’s Financial Services Commission (FSC) is planning to set up an open interbank payment network in 2019 that will be accessible to banks and fintech firms as the country looks to scale up its fintech business sector and bring down required usage costs, The Korea Herald reports.

Under this system, users will be able to use a single mobile app to access diverse bank accounts and make cross-platform transfers or payments.

Also read: Tech firms set to raise stake in Korea's internet-only banks

Currently, banks in the country have sole access to the financial payment network used to facilitate money payments and transfers and each bank is limited to handle its own banking services. This scheme prompts fintech firms to sign one-on-one partnerships with individual banks.

The FSC has established the interbank financial payment network called ‘Open Banking’ to respond to this problem. The network’s usage fees will also be lowered by a tenth from the current rate of $0.35-0.45 (KRW400-500) and will be even smaller for startups.

The commission noted that the network will be progressively set up, starting with the FSC launching the Open Banking System in partnership with local banks.