Digital Banking

South Korea FinTech Gets Initial Approval For Online Bank

S. Korea FinTech Gets Approval For Online Bank

South Korean FinTech startup Viva Republica, creator of the financial services platform Toss, was granted preliminary approval for a digital banking license from the Financial Services Commission of Korea, a Monday (Dec. 16) press release indicated.

“Toss has already become the leading financial super app in Korea. With a digital bank license, we will be able to broaden our product offering … so that we can accelerate our mission to innovate the financial industry,” said SG Lee, CEO of Viva Republica.

Since its launch in 2015, Toss has become the only FinTech unicorn in Korea. The bank is expected to start operating during the first six months of 2021 after it gets the final nod for a license.

A digital banking license will enable Toss to offer an extensive menu of financial services to individuals and businesses. Calling itself a “challenger bank for the underbanked,” Toss will even offer banking products to people with thin files and mid-range credit scores.

Viva Republic, which was founded in 2013, first launched Toss as a peer-to-peer (P2P) money transfer service, Deal Street Asia reported. Toss Bank will become South Korea’s third digital bank operating without a physical location. In 2017, two internet-only banks – K Bank and Kakao Bank – officially launched.

Valued at $2.2 billion following August’s $64 million funding round, the Toss app has been downloaded more than 30 million times and has over 16 million registered users – over 20 percent of South Korea’s population.

Last year, Kakao Bank and K Bank reported net losses of 21.2 billion won ($18 million) and 79.7 billion won ($68 million) respectively, according to data from the Korea Federation of Banks, Deal Street Asia reported.

On Oct. 31, South Korea started a pilot-testing program for open banking. The South Korean government said it would run the pilot phase and then assess the system and its performance, making adjustments as necessary. The system will be released to FinTech firms by Wednesday (Dec. 18).

——————————

NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

TRENDING RIGHT NOW