South Korean Credit Card Firm Receives Patent for Blockchain Credit System

South Korean credit card company, Shinhan Card has been awarded a patent for a Blockchain-based payments system, the Korea Times reported Monday.

Shinhan Card, per the report, established a blockchain-based credit transaction process through the new technology, setting the company as the first in the world to develop a credit transaction service to be powered by the blockchain.

The new service features more functions, including setting a maximum spending limit, completing payments between merchants and consumers and, paying in monthly installments.

An official at Shinhan 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 blockchain-based services available are limited to cash wiring or user identification for online transactions.” 

The firm further noted the possible implementation of cardless transactions, following the patent. Hence, customers can easily make payment using mobile devices via app-to-app purchases, 

Notably, the development is likely to bring a phase-out of the three networks of intermediaries, which includes the credit card firms, a value-added network (VAN) service provider, and a Payment Gate.

A step closer to full integration of smart electronic devices, payment requests based on the new blockchain technology can be made by home appliances, as well as automobiles within spending limits set by the card owner.

“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 U.S., Japan, China, Vietnam, and Indonesia,” the official added.

Meanwhile, the U.S. cryptocurrency exchange, Coinbase launched its Visa debit card (Coinbase Card) as a physical contactless card, that can be used for cash withdrawal from ATMs, alongside a mobile app.

The app syncs directly with Coinbase account, giving users a more comprehensive option of cryptocurrency. However, users are to pay a certain amount for the service, as Coinbase charges fee to convert fiat currencies. 

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