Travel Card Trap: How a ‘Free Overseas Withdrawal’ Loophole Became a Gateway to Excessive Gambling

Shinhan Bank and Toss Bank Reduce Maximum Monthly Withdrawal Limits in Macau, the Philippines, and Hong Kong

It has been found that travel cards that advertise ‘Free overseas ATM withdrawal fees’ are being used for overseas gambling. This is a method of withdrawing cash without fees from local ATMs (automatic teller machines) and using it at casinos, etc. Some banks are belatedly reducing withdrawal limits in Macau and the Philippines, but there are also criticisms that there are loopholes in foreign exchange management.

According to the financial sector on the 25th, starting from the 1st of next month, the overseas ATM withdrawal limit for Shinhan Financial Group’s ‘Shinhan SOL Travel Card’ in Macau, the Philippines, and Hong Kong will be reduced from the maximum of $50,000 to $10,000 per month. The combined withdrawal amount from the three countries cannot exceed $10,000 per month. Shinhan Bank plans to apply the reduced limit nationwide starting in November.

It is explained that this is for risk management purposes such as local financial crimes and loss, but it is reported that the use of travel cards for overseas gambling has had a major impact on the reduction in withdrawal limits. Hong Kong, Macau, and the Philippines, where the reduction in withdrawal limits took place a month earlier, are regions famous for casino tourism.

Toss Bank has already limited the maximum withdrawal limit in Hong Kong, Macau, the Philippines, Thailand, and Singapore to $3,000 per month ($1,500 per day) since last August. This is about 30% of the limit in other countries ($10,000).

Travel cards that boast overseas local payments and free ATM withdrawal fees are gaining popularity, but they are being used in places other than travel. This is a way to use free ATM withdrawal fees to withdraw gambling funds in cash locally.

According to the Foreign Exchange Transactions Act, if you are carrying cash worth more than $10,000 and leaving the country, you must report it to the customs office in charge. This is to prevent it from being used for illegal purposes such as drug and gambling, or for money laundering.

However, if you use a travel card, you can take advantage of free withdrawal fees and other benefits to carry more than $10,000 with you when you leave the country. In some countries, you must report to the local customs office in advance if you enter the country with more than $10,000 in cash. Any amount exceeding that amount will be confiscated, and in some cases, you may be arrested on suspicion of money laundering.

Online communities are already sharing details on how to use travel cards at casinos and other places. They also share tips on how to withdraw cash from ATMs in certain areas according to your limit. Tips are also being shared, such as carrying no more than $10,000 and using local ATMs to withdraw cash after leaving the country.

There is also talk of making a travel card for each bank and withdrawing cash locally. This means that you can secure more than 50 million won in cash locally without any fees per month.

In particular, Shinhan Bank and Toss Bank’s travel cards were notable for their higher withdrawal limits than those of other banks when they were first launched, as they were based on foreign currency accounts. It is reported that cash withdrawals are higher than actual usage in certain countries.

Travel cards are also used for overseas study funds. Students make a travel card in Korea or take a travel card in their parents’ name and withdraw cash locally. The limit for overseas remittances that do not require supporting documents is $100,000 (133 million dollars).

The fraudulent use of travel cards is also a concern in the industry. Woori Bank, which participated as a follow-up to the travel card, decided to set the monthly usage limit at a maximum of $5,000 during the product design process due to concerns about fraudulent use.

A credit card industry insider explained, “We compile overseas usage amounts and overseas withdrawal amounts for each customer and report them to the National Tax Service on a quarterly basis through credit associations.” Another financial industry insider said, “If it has the effect of carrying more than $10,000 in cash, overseas financial authorities may also raise issues.”

Reporter Kim Nam-i kimnami@mt.co.kr

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