Today it was reported that South Korea’s biggest card company, Shinhan Card, will launch a blockchain-based payment system. The firm, part of Shinhan Financial group an sister company to Shinhan Bank, claims to be the first to use the technology for credit card transactions.
In an interview with Korea Times, Shinhan Card’s digital lead Ryoo Tae-Hyun revealed that the firm is working on multiple innovations. These include facial recognition, Internet of Things (IoT), and distributed ledger technology (DLT) for payments. All the initiatives move towards its goal of ‘deviceless’ payments.
Shinhan Card plans to issue its own blockchain-based cryptocurrency to users of its credit cards. With DLT, transaction records would be immutable allowing the firm to trace credit more efficiently. It has already gained a patent for the system in Korea and has applied for one in the US, China, Japan, Vietnam, Indonesia, and the EU.
Ryoo explained: “With our system, we provide our customers with cryptocurrencies available at our affiliated stores, in accordance with their credit limits.”
“Cryptocurrencies developed by other blockchain companies can only be used at a limited number of stores. Ours can be used at a wider range of places, because we have served as a platform for our customers and affiliated stores for over the past 30 years,” he continued.
It seems like the firm hopes to leverage its relationships and leading status in Korea to increase adoption of its planned digital currency. Ryoo added that Shinhan Card’s cryptocurrency would tie into its IoT payment technology. He said: “We installed our payment module in products from Hyundai Motor and LG Electronics. Our customers will be able to do grocery shopping with LG ThinQ refrigerators.”
“This means that products themselves become our affiliates. If the nation’s manufacturers pay more attention to cooperation with financial firms, the pace of innovation will be much faster,” Ryoo stated. He also revealed Shinhan Card’s plans for a facial recognition payment system, which, with the firm’s IoT and DLT projects, would reduce plastic use.
Shinhan Bank already has multiple blockchain initiatives. In November last year, it was first revealed that the bank uses the technology for internal functions including derivates and swaps. Since then it has worked on a credentialing system for loans and partnered with Kakao’s Ground X for blockchain security.