Samsung Pay users can now wire money intentionally through their mobile phones and save in fees compared to sending money overseas via conventional remittance route.
Samsung Electronics Co. said Wednesday that it has begun the beta version overseas remittance service on its mobile payment system Samsung Pay in partnership with local foreign money transfer operators Hanpass and Sentbe.
The beta service will be available in 17 countries including the United States, China, and Japan. The company plans to gradually expand the service to other countries as well as add more partners.
The company said it was able to cut the remittance service fee sharply by the use of pre-funding and pooling methods. Pre-fund model refers to an arrangement that the remitting agent keeps a certain amount of money with an intermediate agent and sends money to the final recipient account upon customer’s request.
Pooling method is sending money in a pool instead of separate transactions. Both methods do not go through traditional overseas remittance network or intermediary institution, resulting in much lower overseas remittance fee.
To transfer money overseas, Samsung Pay users can use one’s existing bank account, rather than setting up a new account. The remittance service will be offered in various formats including cash pick up at an agent and direct transfer to a specific account.
The launch of Samsung Pay’s overseas remittance service comes after the South Korean government in December decided to revise the foreign exchange act to allow domestic platform service providers like Samsung Pay to partner with foreign money transfer operators to offer overseas remittance services.
„Though Libra has met with fierce resistance from central banks and supervisory authorities and might never see the light of day, in many other cases tech firms (both start-ups and established big players) have successfully captured bits and pieces of universal banks’ traditional value chain. This trend may only intensify in the coming years. In this environment, European banks remain squeezed.”