Banks in South Korea have agreed to make their payment networks fully available to financial technology (fintech) firms by December this year, according to local news outlet Korea Bizwire. The move is seen as the latest in a government effort to encourage the development of modern payment technologies and foster a more competitive financial sector.

Bank payment networks can only be accessed by banks themselves at the moment and even so, only open for transactions between accounts held by themselves. In 2016, a new protocol was jointly launched for an open banking system, which is available to a handful of fintech companies, but at a high cost in fees.

A fully open payment system would allow unbridled access and theoretically, customers should be able to access all their different banking accounts via a single application to make payments across any bank network.

Senior official at the Korea Financial Telecommunications and Clearings Institute Choi Seok-min said that a computer network would be ready by October for a trial period. It expects full access to be ready by October. The immediate benefit would be a huge discount on fees; fintech firms can expect to pay a tenth of current fee levels.

Financial authorities in the country are determined to promote the fintech industry since the National Assembly passed bills last year for a regulatory sandbox that would give fintech firms a controlled environment to experiment technologies under friendly laws.

 

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