May is peak season for foreign tourists in Korea. Japan's Golden Week runs from April 29 to May 10, while China and Taiwan observe Labor Day holidays from May 1 to 5. An estimated 180,000 to 200,000 Japanese and Chinese travelers alone are expected to visit Korea during the holiday period. In the first quarter of this year, 4.76 million foreign tourists visited Korea, a record high. Despite the Middle East conflict and rising fuel surcharges driven by oil price increases, foreigners continue to visit Korea. Orange Square, a company that has provided fintech services for foreign tourists, is rapidly expanding its business based on differentiated data.
Orange Square CEO Lee Jang-baek recently met with Seoul Economic Daily at the company's office in Guro-gu, Seoul, and said, "More than 20 million foreign tourists are expected to visit Korea this year, and we are preparing to launch new services in both business-to-consumer (B2C) and business-to-business (B2B) segments." Founded in 2013, Orange Square has developed B2B fintech solutions. The company began focusing in earnest on fintech services for foreign tourists in 2016 when it introduced its "unmanned currency exchange kiosk." The move reflected Lee's experience studying abroad in Hong Kong and China for more than 10 years.
The unmanned currency exchange kiosk allows foreigners to exchange currency with only passport authentication, without visiting a bank. It was first installed next to a luggage storage area at Hongik University Station in Seoul. Currently, Orange Square operates more than 400 unmanned currency exchange kiosks nationwide. The orange-colored kiosks can be easily found at subway stations frequented by foreigners such as Euljiro 1-ga Station and City Hall Station, as well as at major hotels. "We have hardware technology and expertise related to security, such as passport scanning and counterfeit currency detection," Lee said. "As usage has grown to the point where foreigners check whether a kiosk is installed at their hotel before making a reservation, hotels are now proactively proposing installations."
One key factor behind the popularity of the unmanned currency exchange kiosks among foreign tourists is the expansion of services through the prepaid charge card 'WOWPASS.' WOWPASS, launched in 2022, is a card that can be exchanged and charged through an app or unmanned currency exchange kiosk. It combines payment and transportation card functions in a single card. "Foreigners visiting Korea for the first time used to have to line up at currency exchange booths at the airport and separately purchase and charge a transportation card," Lee said. "Foreigners had to search for ATMs during their travels, but WOWPASS has removed all these barriers." He added, "WOWPASS connects everything foreigners can experience in Korean life. About 2.5 million cards have been issued to date."
The foreigners' currency exchange, payment, and movement data secured through these businesses is Orange Square's differentiated weapon. "We are securing payment data and customer experience data as foreign users post reviews after making card payments," he said. "This is being used for government policy and corporate marketing and commercial district analysis."
Orange Square publishes annual reports analyzing foreign tourist data using machine learning and various statistical techniques. Foreigners' payment patterns can be analyzed by region, time period, and type. Last month, the company analyzed the impact of the BTS concert held in Gwanghwamun on the surrounding commercial district. The analysis showed that foreign spending in the Gwanghwamun area stopped during the performance period and then spread to photo booths in Yeonnam-dong and jjimjilbang spas in Dongdaemun afterward. "We may be the only company in Korea that has secured this much foreigner data," Lee said. "We are also actively utilizing AI in our internal operations."
The company has been growing rapidly since the end of the pandemic. Total revenue surged more than 30-fold in three years, from 800 million won in 2022 to 25 billion won last year. Annual transaction volume through the unmanned currency exchange kiosks and mobile app has been growing 30% to 40% every year since the launch of WOWPASS. "Foreigners from Japan, Hong Kong, Taiwan, and China mainly use the services," Lee said. "Russian tourists, who have a low card usage rate, also use WOWPASS a lot when traveling to Korea."
These results are notable because the company achieved them without engaging in any special marketing. Since the service launch, it has attracted customers solely through word of mouth. Lee attributed this to his experience at the customer service center. For the first three years after the kiosk launch, Lee personally worked at the customer service center. At that time, when kiosks malfunctioned, customers could immediately contact the customer service center through phones installed on the kiosks. This process allowed Lee to quickly identify inconveniences. "Back then, I worked from 6 a.m. to midnight," he said. "Through this experience, I realized that many customers lose their cards and need reissuance, so we later made card reissuance easier." As a result, WOWPASS currently has a repeat usage rate of nearly 40% to 50%. One in three new subscribers is estimated to have used the service on the recommendation of an acquaintance who previously used WOWPASS.
The company's path to its growth trajectory was not easy. Shortly after launching the unmanned currency exchange kiosk service, COVID-19 broke out, and the company faced a survival crisis. "During the COVID period, I covered operating expenses by taking on translation part-time work," Lee said. "I thought foreigners would return once COVID ended, and that doing this business when others weren't would allow us to gain a first-mover advantage later, but we almost lost momentum."
Confidence that the company could secure competitiveness in a market thoroughly targeting foreigners, compared to existing financial institutions, also served as the driving force to endure the COVID period. Banks and card companies primarily use authentication structures based on resident registration numbers and mobile phone numbers starting with 010, and apply UI/UX that is difficult for foreigners to use. The limited customer service center operating hours, from 9 a.m. to 6 p.m. on weekdays, also serve as an obstacle to attracting foreigners. "Foreigners travel to Korea from Friday evening through the weekend, but existing financial companies' customer service centers are closed then," he said. "We installed kiosks considering foreigners' movement patterns and needs, and operated a 24/7 multilingual customer service center, which allowed us to build customer trust."
With the rapid increase in foreign tourists visiting Korea this year, the company is preparing to expand into new businesses. The plan is to add hotel bookings, taxi hailing, and online shopping to the WOWPASS app, beyond charging functions. Since October last year, the company has been piloting sales of eSIMs, direct train tickets between Incheon International Airport and Seoul, and Olive Young mobile gift certificates on the app. "Plastic surgery clinics, pharmacies, roadside shops, and beauty brands are also contacting us to attract foreign tourists," Lee said. "Currently, foreigners visiting Korea find it difficult to shop online due to website authentication, payment, and hotel delivery issues, and solving this is our goal." Lee emphasized, "Our advantage is that we have customer touchpoints throughout the entire process—before foreigners come to Korea, during their trip, and after they return home. Based on the big data we have accumulated on foreigners, we will become a platform that connects foreigners with Korean brands."
