Shinhan Card, South Korea’s top credit card company, has been granted a patent for a blockchain payment system.
As reported by The Korea Times on Monday, the Shinhan Financial Group affiliate said it has developed a “world-first” service based on blockchain technology that offers credit card functionality, including setting spending limits, making monthly installments and payments to merchants.
The Times quotes an “official” from the company as saying:
“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 usher in cardless credit transactions that would see users of the system make payments using apps on mobile devices. In such a development, the invention would disrupt the traditional 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 technology reviews.” the official said.
The patent filing on the website of the Korea Intellectual Property Rights Information Service (Kipris) gves an overview of the invention as follows (via informal translation):
“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 plurality of accounts and for making settlement using the blockchain according to the transaction conditions.”
Shinhan Card is now seeking to expand the credit patent to Europe, the U.S., Japan, China, Vietnam and Indonesia, they added.
Earlier this year, sister firm Shinhan Bank said it was using blockchain technology to speed up the approval process for loan products. Specifically, the bank would use a blockchain platform to verify the items of proof required for credit lending, such as qualification or certification documents.
Edit (10:35 UTC, July 15): Updated with link and details from Kipris.
Credit cards image via Shutterstock