Remittances from South Korea to Vietnam Part 5 - Harnessing the Benefits of Labor Export
In recent years, the movement of Vietnamese workers to South Korea has become a significant economic factor, not only for the individuals involved but also for both countries' economies.
The remittances sent by these workers back to their families in Vietnam have been transformative.
This blog explores the advantages of this remittance flow, especially in the context of the development of labor export.
Data on the Increasing Number of Vietnamese Workers in South Korea Despite Global Economic Challenges Post-Pandemic and War
Growth in the Number of Vietnamese Workers
According to data collected by FinFan from 2018 to the end of 2023, despite the significant impact of the COVID-19 pandemic, the conflict between Russia and Ukraine, and the recent Middle Eastern conflict on the global economy, the number of workers registered to work in South Korea has been steadily increasing.
*Coping with Economic Challenges
Despite global economic struggles, including economic downturns, inflation, and international conflicts, the ongoing migration of Vietnamese workers to South Korea highlights the enduring appeal of this labor market.
The stability in labor demand and supportive policies from both countries contribute to this success.
Positive Sign for the Vietnamese Economy
The increasing number of Vietnamese workers in South Korea is not only a positive sign for labor market development but also has a beneficial impact on the Vietnamese economy through increased remittances.
These funds contribute to the financial stability of many families and drive local economic growth.*
Source: Government and Labor Agency Reports, and Economic and Financial Reports
The Impact of the Increasing Labor Migration to South Korea on Remittances to Vietnam
Increasing the Value of Remittance from South Korea to Vietnam
The increase in Vietnamese workers in South Korea has led to a substantial rise in remittances sent back to Vietnam.
Remittances are crucial for many Vietnamese families, providing financial support for daily needs, education, healthcare, and improving living standards.
As more Vietnamese workers earn wages in South Korea, the amount of money they send home grows, contributing positively to the Vietnamese economy.
Enhanced Financial Services and
The growing demand for remittance services has prompted financial institutions to innovate and improve their offerings.
Competitive exchange rates, lower fees, and faster transfer times are now more common. Moreover, advancements in digital payment solutions and mobile money services make it easier and more convenient for Vietnamese workers to send money home, thus benefiting both senders and recipients.
For instance, the increasing volume of remittances flowing into Vietnam has led traditional banks to enhance their digital banking systems to keep pace with technological advancements.
Additionally, domestic banks could partner with FinFan and our international partners specializing in cross-border money transfers from South Korea to Vietnam.
This collaboration could provide a remittance solution that is "Faster - Safer - More Cost-Effective" for their customers.
At the same time, the increase in remittance volumes also drives the development of other digital remittance channels.
A typical example is the collaboration between FinFan and domestic e-wallet partners such as MoMo, ZaloPay, VNPay, etc. With this integration, users can transfer remittances to Vietnam in just three steps through international partners in South Korea linked with FinFan, such as MoneyGram, Ria Money Transfer, and SentBe.
Step 1: Send information to your relatives abroad to log in to Ria Money Transfer/SentBe
🖥 On computer: Through the website: https://www.riamoneytransfer.com
📱 Download the app on the app store:
o Appstore: search for the keyword Ria Money Transfer/SentBe
o Google Play: search for the keyword Ria Money Transfer
Step 2: Make a money transfer order, then enter recipient information and select ZaloPay/MoMo/VNPay/VNPTPay/… payment method (information must match the phone number registered to the recipient's ZaloPay/MoMo/VNPay/VNPTPay/… account).
Step 3: Complete the money transfer order and the money will be transferred directly to the recipient's ZaloPay account.
For MoneyGram, the process is slightly different. You need to visit the nearest MoneyGram agent location in South Korea, create a money transfer order, and select the option to transfer funds directly to the recipient's e-wallet in Vietnam on the MoneyGram transfer form.
Click here and fill in your address to find out the MoneyGram agent location in South Korea.
Economic Benefits for Vietnam
Remittances from South Korea have several economic benefits for Vietnam:
- Poverty Alleviation:
The influx of remittances helps lift many families out of poverty, improving their quality of life and providing access to better education and healthcare.
- Local Economic Development:
Increased remittances stimulate local economies by boosting consumer spending. This can lead to more investment in small businesses and infrastructure at the community level.
- Currency Stability:
The steady flow of remittances can support the stability of the Vietnamese dong by increasing foreign exchange reserves.
- Remittance flows create Investment Opportunities.
Remittances from South Korea to Vietnam can provide individuals with funds to invest in other interest-bearing financial channels or bank savings.
This not only helps improve the quality of life for individuals but also aids in long-term wealth accumulation.
Challenges and Considerations
While the increase in remittances is beneficial, there are also challenges to consider:
Dependence on Remittances:
Heavy reliance on remittances can create economic vulnerabilities, especially if there are fluctuations in global labor markets or economic downturns.
Earning substantial income during challenging economic times is something everyone desires, especially now as the economy shows signs of recovery but remains fragile, with a still high number of unemployed workers in the market.
This situation has led some individuals, who were previously employed in office jobs, to switch careers and seek labor export opportunities.
Consequently, the number of people remaining in Vietnam to participate in economic activities will continue to decrease, creating an invisible pressure on the entire Vietnamese economy.
Integration of Remittance Services:
Ensuring that remittance services are accessible and cost-effective for workers is essential. This includes providing efficient transfer methods and competitive exchange rates.
Additionally, the integration must align with the needs of users in Vietnam. For instance, the relatives of labor migrants are often older and may fall into the unbanked or underbanked category, lacking bank accounts.
In such cases, they require an integrated service that allows them to receive remittances in cash at a counter. Recognizing this issue, FinFan continuously strives to upgrade technology to develop new products and services.
However, we also maintain traditional services that cater to the needs of recipients in Vietnam.
We support connections with MoneyGram and Ria Money Transfer, enabling recipients to collect remittances at counters through our partner bank branches.
Conclusion Regarding Harnessing the Benefits of Labor Export of Remittance from South Korea to Vietnam
The rise in Vietnamese labor migration to South Korea has had a profound impact on remittances sent back to Vietnam.
As the number of workers increases, so does the financial support they provide to their families, contributing to economic stability and growth in Vietnam.
While this trend presents numerous benefits, it is crucial to address the associated challenges to maximize the positive impact on both countries.
This article was curated and authored by FinFan's market research and development team, alongside our marketing department.
About FinFan
FinFan is a cross-border embedded financial services company that focuses on mass disbursement, fund collection, card processing, IBAN, and digital APMs solutions, which can provide valuable input and integration on and for the same.
FinFan is already integrated with almost the world's well-known MTOs, PSPs, switch, and core fintech platforms such as Money Gram, Thunes, Qiwi, Remitly, World Remit, Bancore, PaySend, Terrapay, Ria Money Transfer (Euronet), Dlocal, Ripple, TripleA, FoMo Pay, Wings, etc.
For more information, please get in touch with us through:
🌐https://finfan.io
📞(+84) 2866 85 3317
✉ support@finfan.vn
LinkedIn: FinFan
Dr. Tuyen Nguyen
Money Beyond Borders
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