KakaoBank launches no-fee dollar deposit service for global use

KakaoBank has launched a service offering dollar purchasing without a fee, allowing users to deposit, spend or send dollars daily.

Oh Bo-hyun, head of foreign currency services at KakaoBank, speaks during a press conference on the bank's newly launched Dollar Bank service held in southern Seoul on Tuesday. [KAKAOBANK]

KakaoBank has introduced a no-fee dollar deposit and exchange service, named “Dollar Box,” the latest in a series of foreign currency exchange offerings launched by banks ahead of the summer holiday season.

While competing currency exchange services focus on travel-related demand, the internet-only bank said that its goal is to facilitate the “daily use” of the greenback for its customers.

"There have been foreign exchange services before, but it seems those were primarily used during vacation seasons for travel purposes and not much else,” said Oh Bo-hyun, head of foreign currency services at KakaoBank, during a press conference held in southern Seoul on Tuesday.

"Dollar Box can be used on a daily basis to deposit, spend or gift dollars, as well as when traveling abroad.”

KakaoBank customers can open one Dollar Box account each, with a daily deposit limit capped at $5,000 and withdrawals at $10,000. The service is available around the clock year-round, with no fees charged for deposits or withdrawals.

The service can be used to invest in dollars, offering a comparison of the average exchange rate at the time of purchase and the current rate. Customers can also send up to $500 a day through the KakaoTalk messenger app and receive up to $5,000 a month.

Oh said that the bank plans to maintain its service free of charge, saying that its revenue model is based on asset investments.

“KakaoBank set up a new asset management system for financing and managing foreign currencies earlier this year,” he said.

“The more customers who use our Dollar Box service, the easier it gets for us to raise dollars,” explained Oh, adding that the bank "will run our services based on the sound utilization of funds so that we will be able to continue to provide customer benefits.”

Moreover, the Dollar Box feature can be linked to Travel Wallet, a payment service provider, enabling its customers to make payments or cash withdrawals when traveling overseas. The service is available in 70 countries worldwide.

The bank is focusing only on the U.S. currency, which accounts for 81 percent of foreign currency deposits in Korea as of April, according to data compiled by the Bank of Korea.

KakaoBank first began its foreign currency remittance service in 2017, offering fees far lower than the market average.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]