The updated system will allow account customers to switch their monthly automatic payments between first- and second-tier financial firms for handling.
South Korea’s FSC (Financial Services Commission) has announced it is allowing customers to swap their online bank accounts handling automatic monthly payments among first- and second-tier financial institutions.
Starting Tuesday (26 May), customers who wish to switch payment accounts to a different bank can apply at the bank they wish to deal with or at the ‘PayInfo’ website, operated by the KFTC (Korea Financial Telecommunications & Clearings Institute), a non-profit organization which manages several inter-bank payment systems in the country.
The PayInfo service was first launched in October 2015, simplifying the process for customers to switch their monthly automatic payments for utilities, insurance and other purposes to a different bank. Since the launch, nearly 23.4 million switches in automatic transfer accounts were made, as of December 2019.
Previously, customers had to cancel each instruction separately at different banks, and customers could only switch to institutions within the same business tier. For instance, customers who held accounts at first-tier and major commercial banks were only able to switch to accounts with around 13 other banks that were classified as in the same business tier.
The updated system will now allow account switching between first- and second-tier financial firms – including non-banking financial institutions such as savings banks, cooperatives, agricultural banks, and the postal banking service.
The FSC says the new service will help improve convenience for consumers and promote competition between financial institutions.
Korea also plans to introduce a similar system for card-based automatic transfers, where consumers are afforded more freedom to cancel or switch between different cards.
Additional reporting from Korea Herald