Shinhan Card patents blockchain-based system with credit card functionality

South Korean credit card giant Shinhan Card has been granted a patent for a blockchain-based payment system, The Korea Times reported.

The company has reportedly claimed that the blockchain-based technology is the first in the world to enable various credit card processes including “setting a maximum spending limit, paying in monthly installments and completing payments between merchants and consumers.”

An official at Shinhan Card said that the patent has been obtained about a year and a half after the company commenced a feasibility study including technology reviews.

"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 official was quoted saying.

"We are seeking measures to make the patent valid in European countries, the U.S., Japan, China, Vietnam and Indonesia.”

The patent-winning technology could also allow for cardless transactions, enabling customers to make payments via app-to-app transactions using mobile devices. This, in turn, has the potential to eliminate three intermediaries, including credit card firms, a value-added network (VAN) service provider and a Payment Gate (PG).

The patent filing available on the Korea Intellectual Property Rights Information Service (Kipris) website states (as quoted by CoinDesk):

“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.”

Earlier in May, Shinhan Financial Group (Shinhan Bank), the parent company of Shinhan Card, unveiled a blockchain-based platform to hasten loan process.

As previously reported, 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.

More recently, reports suggested that the bank was planning to impose tougher regulations on accounts linked to cryptocurrencies.