Toss cuts transfer fees to zero ahead of Toss Bank opening
Toss will not charge commissions for transfers, choosing to lose money on every transaction ahead of the opening of Toss Bank.
All Toss app users will get free transfers for life. To date, up to 10 transfers were offered for free, and after that they cost 500 won (43 cents) per transfer. Users who press a notice on the app are eligible for the benefit.
The company aims to “improve convenience” and end the hesitation customers may have in using a service that costs money, Toss said Monday.
“By clearly removing that hurdle in money transfers, which is the most frequent financial service used by people, and offering them unparalleled satisfaction, we aim to distinguish Toss from other platforms,” said Lee Seung-gun, head of Viva Republica.
Viva Republica owns 34 percent of Toss Bank.
“The reason why we made the decision, even though it will cause us financial losses, is because the reason for the existence of Toss and its fundamental principle is a customer-centered approach,” Lee added. “With the new policy, we were able to take a step closer to achieving our vision to become the only financial app that is truly necessary for customers.’”
The zero-commission transfer service will also apply to Toss Bank, the country's third internet-only bank. It is scheduled to open in September.
Toss Bank will focus on increasing loans to the less creditworthy and thin filers, those lacking sufficient financial history for a full credit analysis, while making financial products and overall banking services easier for customers to understand. The services will be available within the existing Toss money transfer app.
Of 18 commercial banks and internet-only banks in Korea, 12 banks currently charge 500 won of commission fee per a transfer of 10,000 won or less to accounts of another bank, according to data by the Korea Federation of Banks.
The registered users of the Toss app exceeded 20 million as of end of May, 56 percent 30 or under. It recorded 169 trillion won in accumulated transfer volume so far since its introduction in February 2015.
BY SARAH CHEA [firstname.lastname@example.org]