Workforce Payments Guide South Korea
Last updated: Dec 18, 2023
Papaya Global fully support payments in South Korea.
Papaya Global supports payments to contractors in South Korea. The payout currency may vary based on the receiver bank account setup when receiving foreign currencies. it is advised for contractors to reach out to their bank to confirm how foreign currencies are handled
In South Korea, the Know Your Customer (KYC) process for companies involves several steps:
- Customer Verification & Background Checks: Comprehensive KYC checks are performed to verify the customer’s identity. This includes analyses of Politically Exposed Persons (PEP), Global Watch Lists, Sanctions, Adverse Media, and Global Identification data.
- Document Verification: Various documents are verified for authenticity. These include:
- National Identity Card: ID cards issued by the Computerized Resident Information Centre under the Ministry of Interior and Safety (MOIS) are checked for accuracy of format, detection of tampered/forged cards, verification of hologram/rainbow print, etc.
- Passport: South Korean Passports issued by the Immigration Department – Ministry of Foreign Affairs are verified. Businesses can use this for Customer Due Diligence (CDD) in South Korea by verifying the nationality, name, and DOB of customers.
- Driving License: The originality of a driving license issued by the Road Traffic Authority is checked and licenses of all 9 provinces of South Korea are verified.
- Credit/Debit Card: Credit/debit cards are verified to help digitize your business, reduce manual labor, prevent fraud and charge-back, increase conversions, and reduce drop-offs.
- Data Extraction & Face Verification: After document verification, data is extracted and face verification is performed.
- Compliance with Local Laws: It’s important to note that the KYC process must comply with local laws. For instance, the Personal Information Protection Act in South Korea stipulates that local companies cannot legally request social security numbers, except under exceptional circumstances, such as for major banking transactions.
Please note that the exact process may vary depending on the specific requirements of the company and the regulatory framework in South Korea.
Opening a bank account
To open a company bank account in South Korea, the following requirements should be fulfilled:
- A local phone number and address is required.
- Valid Passport: A valid passport is needed.
- Valid Visa: A valid visa to stay in South Korea is required.
- Alien Registration Card: This is a residency card in the country.
- Proof of Address: A copy of your address written in English and Korean is required for the bank to capture it.
Please note that not all these documents are required by every bank. Certain banks in South Korea allow foreign citizens to open accounts as foreigners. Initial Deposit: Some banks may require an initial deposit to activate the account.
Opening a corporate bank account in South Korea may take several weeks or more. The length of time can vary depending on the bank and the type of account being opened.
There are several major foreign banks that operate in South Korea. Here are some of them:
- Citigroup (Citibank Korea)
- Standard Chartered (Standard Chartered Korea)
- Agricultural Bank of China
- ANZ Bank
- Bank of America
- Bank of China
- Bank of Communications
- BNP Paribas
- BNY Mellon
- China Construction Bank
- China Everbright Bank
- Credit Agricole Corporate and Investment Bank
- Credit Suisse
- DBS Bank
- Deutsche Bank
- Industrial and Commercial Bank of China
- ING Bank
- JPMorgan Chase
- Mizuho Bank
- MUFG Bank
- Societe Generale
- State Bank of India
- Sumitomo Mitsui Banking Corporation
- United Overseas Bank
- Wells Fargo
Major Local Banks
There are several major local banks that operate in South Korea. Here are some of them:
- Bank of Korea
- Export-Import Bank of Korea
- Industrial Bank of Korea
- Korea Development Bank
- Nonghyup Bank
- Suhyup Bank
- Citibank Korea
- Hana Bank
- Kookmin Bank
- Standard Chartered Korea
- Shinhan Bank
- Woori Bank
- Daegu Bank
- Busan Bank
- Kyongnam Bank
- Kwangju Bank
- Jeonbuk Bank
- Jeju Bank
- K Bank
- Toss Bank
In South Korea, there are several B2C payment tools available. Some of the top mobile payment service providers include:
- Naver Pay
Other popular alternative payment solutions include Samsung Pay and SmilePay. These tools are widely used by online shoppers in South Korea.
cryptocurrency is acceptable and popular in South Korea.
In March 2020, the South Korean National Assembly passed new legislation that paved the way for the regulation and legalization of cryptocurrencies and crypto exchanges. This action was taken in recognition of the growing cryptocurrency ecosystem.
However, while cryptocurrency and crypto assets providers are implicitly and explicitly regulated in South Korea, there are no explicit prohibitions against cryptocurrencies. South Korean citizens can own cryptocurrencies and trade on licensed exchanges.
Note that while it is legal to own, sell, and buy crypto assets in the country, crypto assets have not been legalized as official tender by the South Korean government. Therefore, the use and acceptance of cryptocurrencies as a form of payment may vary.