South Korea plans to ease foreign exchange transaction rules to reduce inconveniences for companies and individuals as well as create new business opportunities, the government said Monday.  
  

Under the plans, local firms will be allowed to enter money transfer businesses like those operated by MoneyGram and Western Union. In addition, local payment gateway firms will be able to process on-line international transactions, according to the finance ministry.
  

Companies can also benefit from not being required to report transfers of money for overseas investments, which were required in the past, it said.
  

In addition, the government's plan to allow local brokerages to engage in foreign exchange transactions can fuel competition and compel firms to provide better services to customers. Such developments can make local financial firms more competitive on the international stage.
  

The reforms come as the financial sector and the country's asset market as a whole have not grown as expected and have contributed less to tax earnings over the years, the finance ministry said.
  

Asia's fourth-largest economy revised its Foreign Exchange Transaction Act in 1999, which technically lifted most restrictions, yet various reporting rules effectively impeded the free movement of money.
  

Currently, the Bank of Korea, other currency authorities, and local banks all keep close watch on foreign exchange transactions to prevent people and companies from not paying their dues or trying to hide their wealth abroad.
  

According to the finance ministry, since 1999, total trade jumped 4.4 times, foreign transactions as measured in volume terms surged 6.6-fold, with individual transfers of money abroad surpassing the 10 million mark per year in 2014, from around 4 million.
  

Under such circumstances an overhaul is needed, especially in the face of breakneck changes taking place elsewhere, according to the ministry.
  

In particular, critics have said the country's restrictions have effectively isolated South Korea from the worldwide growth in fintech businesses, despite its leading position in the information technology field. Fintech is an emerging business that makes use of software to facilitate financial services.
  

"To make up for lost time, the government will implement meaningful reforms that can directly impact everyday corporate activities and individual lives," a government official said. (Yonhap)