Shinhan Card develops blockchain-based payment system
Shinhan Card has obtained a patent for a blockchain-based payment system. The company is the first in the world to have established a credit transaction service using the new record-keeping technology, it said Monday.
With the patent-winning technology, the card firm has established a blockchain-powered credit transaction process that enables various functions, such as setting a maximum spending limit, paying in monthly installments and completing payments between merchants and consumers.
"Services using those key functions of credit cards will be extended to the blockchain-based system, a notable advancement from the status quo whereby most blockchain-based services available are limited to
cash wiring or user identification for online transactions," a Shinhan Card official said.
"We obtained the patent about a year and a half after we initiated a feasibility study including technology reviews. We are seeking measures to make the patent valid in European countries, the U.S.,
Japan, China, Vietnam and Indonesia," he added.
Also notable is a possible early implementation of cardless transactions, meaning customers will be able to pay mostly via app-to-app transactions using mobile devices.
This means a phase-out of the network of three intermediaries ― credit card firms, a value-added network (VAN) service provider and a Payment Gate (PG) ― is likely.
The three have divided a fee per transaction in
exchange for real-time money transfers.
A VAN service provider connects the credit card company and member stores to verify and approve transactions, following which the PG makes the payment.
With the new blockchain technology, payment requests will be made by home appliances and automobiles within spending limits set by a card owner, a step closer to a full integration of "smart" electronic devices.
This is in line with the internet of things, defined as an extension of connectivity into physical devices and everyday objects.
"We, as the industry leader, will continue to explore ways to implement business models in accordance with the regulations," the official said.