South Korea's Shinhan Card Develops Blockchain Payments Network

Neil Dennis

South Korea's biggest credit card operator, Shinhan Card, announced on Monday it had been granted a domestic patent and was developing a blockchain-powered payments system.

Shinhan Financial Group, an affiliate of the card company, said it had developed the world's first blockchain service that offers full credit card functionality such as setting spending limits, making monthly installments and paying merchants.

Reported in the Korea Times, a spokesperson for the 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.

Patent Submission

The patent, filed with the Korea Intellectual Property Rights Information Service (KIPRIS), describes a system for building a blockchain "including a virtual currency generated according to a credit limit of a consumer". Blocks will be updated on the blockchain according to payment details.

This means the company will be able to develop a cardless method of transaction allowing customers to pay for goods using an app on their mobile phones.

Shinhan's spokesperson added:

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 US, Japan, China, Vietnam and Indonesia.

Shinhan Bank Blockchain Ambitions

Affiliate Shinhan Bank has already made progess on blockchain technology, using a distributed ledger platform to speed up the approval process for loans and mortgages.

Instead of submitting identity, payslips and other important documents for manual verification, the bank will use blockchain to verify such items. Last year the bank trialled a cross-border remittances system for its business customers using Ripple's blockchain.

Eliminate the Middlemen

Shinhan Card believes that by using blockchain technology in its payments system it will eventually eliminate the need for other financial intermediaries in the transaction process.

Credit card companies operate with two other counterparties in transactions: a value-added network (VAN), which acts as intermediary between card company and vendors to verify and approve transactions, and a payment gate (PG), a financial services provider which makes the physical payment.

Speaking to the Korea Times, Shinhan Card's spokesman concluded:

We, as the industry leader, will continue to explore ways to implement business models in accordance with the regulations.

1.9 Million U.K. Residents Own Cryptocurrencies, FCA Research Finds

Research conducted by the United Kingdom’s Financial Conduct Authority (FCA) has found that 1.9 million U.K. residents currently own cryptocurrencies, while 2.6 million are estimated to have bought crypto “at some point.”

The research report published by the FCA into how consumers interact with cryptocurrency markets in the U.K. found that 3.86% of the country’s general adult population owns cryptocurrencies, as its adult population is estimated to be of approximately 50 million people.

To the FCA, there was a “statistically significant increase” in cryptocurrency holders throughout the UK as last year roughly 3% of the country’s adult population owned crypto at some point, and is now up to 5.35%. The rise brings to the total number of U.K. residents who ever held crypto up to 2.6 million, up from 1.5 million.

While the amount of adults owning crypto is relatively small compared to the total adult population, industry awareness appears to have hit a new high, as 73% of polled adults revealed they have heard of cryptocurrencies, up from 42% last year.

According to the FCA’s research, however, 75% of the 1.9 million people that currently hold crypto in the U.K. have less than £1,000 (around $1,230) in the space, with 83% of them buying their assets via exchanges that are not based in the U.K. Those who do buy crypto are nevertheless aware of the risks, per the FCA.

The report notes most “seem to understand the risks associated with the lack of protections, the high volatility of the product and have some understanding of the underlying technology. The report adds this isn’t the case for all:

Nevertheless, the lack of such knowledge among some presents potential consumer harm to consumers. 11% of current and previous cryptocurrency owners thought they were protected. This amounts to approximately 300,000 adults.

The most common reason for U.K. consumers to purchase crypto, it adds, was as a “gamble that could make or lose money.”

Crypto Ads' Influence 

The FCA’s report also found that 45% of current and former cryptocurrency holders had seen cryptocurrency-related ads. A total of 35%, around 400,000 people, said the crypto-related ads made them more likely to invest in the space.

Overall, 16% of those who have had or currently have cryptocurrencies revealed they have been influenced by crypto-related ads. The report, however, also claims the “media’s role in raising consumer awareness about cryptocurrencies has risen.”

As CryptoGlobe reported earlier this year, the FCA added nine new financial crypto companies to its warning list, as it has been ramping up efforts to keep consumers safe even if they are investing in the crypto space. Cryptocurrencies are not covered by consumer protections.

Featured image via Pixabay.