[Asia Economy Reporter Kiho Sung] Toss Bank is gaining momentum even before its launch by offering unprecedented benefits. It provides a savings account with a 2% annual interest rate on demand deposits without any preferential conditions, along with a check card that offers a groundbreaking benefit of 46,500 KRW per month without any monthly spending or minimum payment requirements. The industry is showing caution toward Toss Bank's aggressive initial approach. On the other hand, Toss Bank expresses confidence, stating that this conclusion was reached by minimizing cost structures and through various analyses.
According to the financial sector on the 11th, Toss Bank introduced its first products yesterday: a demand deposit account and a check card. Toss Bank is scheduled to launch early next month, and this was the first time related products were unveiled. On the first day of the announcement, it was confirmed that more than 200,000 people had signed up on Toss Bank’s pre-registration waiting list.
The most eye-catching aspect of the pre-registration is the unprecedented benefits. The “2% annual interest with no conditions” Toss Bank account pays 2% interest annually on a single demand deposit account without any restrictions on the subscription period or deposit amount. If you open a Toss Bank account through pre-registration, 2% interest is calculated from the date the money is deposited and paid monthly.
The check card is also designed to allow users to enjoy various benefits without any monthly spending requirements. When using the card in five major categories (coffee, fast food, convenience stores, taxis, and public transportation), users receive an immediate cashback of 300 KRW per category daily (public transportation cashback is credited the next day). Users can receive up to 46,500 KRW back per month. Overseas, 3% cashback is provided immediately on spending both online and offline. This is among the highest benefits offered by check cards released domestically. Transfer fees, as well as domestic and international ATM withdrawal and deposit fees, are unlimited and free. These benefits apply during the first season, which lasts until January 2 of next year. Toss Bank plans to offer new benefits tailored to customers’ spending patterns each season going forward.
The reason Toss Bank is attracting consumers with such unprecedented benefits is interpreted as an effort to absorb as many users as possible amid recent financial authorities’ regulations on big tech companies like Naver and Kakao. Additionally, the key to success lies in how many existing Toss users can be attracted to Toss Bank, making early customer acquisition extremely important.
The financial industry believes that it will be difficult for Toss Bank to provide such extraordinary benefits in the long term. However, Toss Bank maintains that there is no major problem because it has drastically restructured its business model to minimize costs.
Hong Min-taek, CEO of Toss Bank, said, “We focused on designing products so that customers who deposit money do not need to compare and worry about which bank or product is better,” adding, “Users will be able to experience a newly designed banking service from their perspective.”
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