Top South Korean Credit Card Company, Shinhan Card, Patents Its Blockchain Payments System
South Korea's most popular credit card firm, Shinhan Card based in Seoul has been granted a patent for its blockchain-based payments system.
According to the report shared by the Korea Times, the firm using the newest patent technology has built the global’s first blockchain-powered credit card transformation process that enables settling spending limits, carrying out monthly installments and payments to merchants.
One of the representatives, authorized to talk to the media from Shinhan Card International said about the development:
“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.”
According to the official, the cards company was awarded the patent a year and a half after carrying out a feasibility study and the company was in the process of seeking patents from European countries, the US, Japan, Indonesia, China, and Vietnam.
According to the report, the patent has the capacity to carry out cardless credit card transactions that enable users of the system to payments through mobile apps. This initiative could eliminate the network of the three intermediaries: the credit card company, a value-added network (VAN) service provider and a payment gateway.
Value-added networks refer to the service providers which credit card firms and member stores by verifying and approving transactions; however, the payment gate is meant to complete transactions.
Shinhan Card’s blockchain system aims to introduce app-to-app, cardless transactions and could pose a threat to payment intermediaries like credit card firms, value-added network service providers and payment gates. The official from the company noted:
“This is a notable advancement from the status quo, whereby most blockchain-based services available are limited to cash wiring or user identification for online transactions.”
The patent filing that is available on the site of the Korea Intellectual Property Rights Information Service (Kipris) offers an outline of the invention.
According to the filing the patent is for a blockchain generating unit for generating a blockchain including a virtual currency generated according to a credit limit of a consumer and updating the blockchain according to payment details, and a transaction generating unit for storing transaction conditions corresponding to each of the pluralities of accounts and for making settlement using the blockchain according to the transaction conditions.
Exploring Blockchain Opportunities
According to CoinDesk, Shinhan Financial Group (Shinhan Bank), the parent company of Shinhan Card has been exploring different blockchain solutions and services and in early May, the company launched a blockchain-based platform to hasten loan process. The bank would use a blockchain platform to verify the items of proof required for credit lending, such as qualification or certification documents.
Shinhan Bank sought to expand the use of blockchain technology in its processes since last year. It fully embraced blockchain technology with transactions that involve Interest Rate Swap (IRS) and smart contracts.
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