Woori Card to Introduce Overseas ATM Withdrawal Limit Starting Next Month
Shinhan, Hana, and NongHyup Cards Previously Implemented Withdrawal Limits
[Asia Economy Reporter Ki Ha-young] Card companies have been successively regulating the withdrawal limits for overseas ATMs. This is to prevent the risk of illegal currency exchange transactions caused by virtual currencies, which have been identified as the main reason for the surge in cash withdrawals using overseas ATMs.
According to the industry on the 24th, Woori Card will establish a new overseas ATM withdrawal limit starting next month on the 1st. Individuals can withdraw up to 50 million KRW per month from overseas ATMs. Currently, overseas usage transactions are allowed up to 20 million KRW per card per month, so holding multiple check cards made it possible to withdraw large amounts. However, with this new limit, while the overseas usage limit per check card remains the same, the amount that can be withdrawn overseas is limited to a maximum of 50 million KRW per person per month.
Earlier, Shinhan Card, the industry leader, also applied a new overseas ATM limit for check cards starting this month. The limit is up to 50,000 USD per person per month. Like Woori Card, the overseas transaction limit per check card is 20,000 USD, but the amount that can be withdrawn overseas is capped at 50,000 USD per person per month.
Hana Card and NH Nonghyup Card have also reduced their overseas withdrawal limits this year. Hana Card strengthened the overseas ATM withdrawal limit for check cards from 10,000 USD per card per month to 10,000 USD per user per month starting at the end of April. NH Nonghyup Card reduced the withdrawal limit from 20,000 USD to 10,000 USD per check card per month.
KB Kookmin Card and Lotte Card have been operating with overseas ATM usage limits set per user for some time. They explained that they have been operating with a relatively low limit of 20 million KRW per person per month. Samsung Card allows withdrawals up to 30 million KRW per card per month but is considering additional restrictions.
Surge in Overseas ATM Withdrawals... Concerns Over Illegal Currency Exchange Due to Virtual Currency Price Differences
The reason card companies are strengthening overseas ATM withdrawal limits is interpreted as the increase in overseas ATM withdrawals amid the blocked air routes due to the COVID-19 pandemic. The industry views the price difference between domestic and international virtual currencies as the main cause.
According to the virtual currency market intermediary site CoinMarketCap, as of 2:50 PM on the 24th, Bitcoin is trading at 32,813 USD (37.25 million KRW) in the global market, while on Korea's virtual currency exchange Upbit, it is trading at 38.3 million KRW. There is a price difference of about 2.81% (1.05 million KRW). At one point, this so-called 'Kimchi Premium' reached 10-20%. Because of this, illegal foreign exchange transactions, commonly called currency exchange, have increased as people try to profit from the arbitrage by purchasing virtual currencies overseas.
Since 2018, card companies have independently blocked virtual currency payments at overseas exchanges. It is difficult to check the status of overseas merchants one by one, so when overseas payments occur, they share information about merchants suspected to be virtual currency exchanges. So far, the number of overseas virtual currency exchanges shared by card companies has reached about 800.
An industry official explained, "As overseas ATM cash withdrawals have rapidly increased recently, card companies are strengthening regulations from a risk management perspective."
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