Shinhan Card, South Korea’s leading credit card company, has obtained a patent for a blockchain-based payment system.
As reported by The Korea Times, the subsidiary of Shinhan Financial Group said it has developed a global financial service based on blockchain technology that offers the same features as a credit card, including setting spending limits, monthly instalments and payments to merchants.
Reducing the number of intermediaries
A member of the Korean company said:
“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 of the blockchain-based services available are limited to cash wiring or user identification for online transactions.”
The patent, according to the report, could introduce credit transactions without the need for a physical card. Users of the system will be able to make payments simply by using an app on mobile devices.
The system developed by Shinhan Card would disrupt the traditional credit card system based on three intermediaries: the credit card company, a value-added network (VAN) service provider and a payment gateway.
“We obtained the patent about a year and a half after we initiated a feasibility study including blockchain technology reviews”.
Expansion beyond South Korea
At the beginning of the year, the subsidiary Shinhan Bank declared that it was already testing blockchain technology with the aim of accelerating the loan approval process.
To be specific, the bank uses a blockchain platform to verify the evidence required to obtain credit, such as documents, qualifications and certifications.
“As an industry leader, we will continue to explore new ways to implement regulatory-compliant business models”.
The Shinhan Card is trying to extend the patent outside of South Korea. In particular, it would like to expand into Europe, the United States, Japan, China, Vietnam and Indonesia.