Foreign Payment Market Booms with Influx of Tourists; Banks and Fintechs Vie for Prepaid Card Dominance

South Korea's financial landscape is witnessing a fierce battle for dominance in the burgeoning foreign payment market, fueled by a significant increase in international visitors. Fintech firms and internet banks are vying for market share by highlighting the ease and convenience of their digital platforms, while traditional commercial banks are leaning on their established physical networks and customer service capabilities to attract foreign spenders through prepaid card services.

The surge in tourism, with a record 18.94 million foreign visitors last year according to the Korea Tourism Organization, has created a lucrative market. The average spending per tourist, excluding airfare, is estimated at $1,327, projecting an annual payment market exceeding 30 trillion won (approximately $22 billion). This lucrative potential has spurred intense competition among financial service providers.

Companies like Toss are enhancing their services by increasing the charging limit for their prepaid cards from 500,000 to 1 million won, simplifying identity verification processes to use only passport information, and enabling easier top-ups via foreign payment methods. Meanwhile, traditional banks such as Woori Bank are set to launch their own prepaid card services this month, aiming to differentiate themselves through their extensive offline infrastructure, including airport exchange booths and ATMs. Kakao Bank also plans to introduce financial services for foreigners within the year, targeting a broad demographic of expatriates and visitors.