| Ryoo Tae-hyun, director of Shinhan Card's digital first division / Courtesy of Shinhan Card |
By Park Jae-hyuk
Korea will evolve from a country known for high credit card use into a first mover in “deviceless” payment systems, according to the nation's leading card firm's executive in charge of its digital transformation strategy.
Ryoo Tae-hyun, director of Shinhan Card's digital first division, told The Korea Times that the era of plastic-free and deviceless payments will be available here within a few years.
“The senior vice president of Visa, who directs the firm's innovation, came to Korea before the Chuseok holiday and told me that he expects Korea will lead the new payment system before the United States or China,” he said.
“Digital payments already account for 16.5 percent of the way our customers make payments. The figure has jumped from 12 percent two years ago.”
According to the director, Shinhan Card is taking the initiative in several futuristic payment systems ― facial recognition-based payment systems, blockchain-powered payment systems and internet of things (IoT) financial platforms.
Ryoo said Korea will take the lead in such technologies, if the government supports the introduction of a nationwide infrastructure.
“By the end of September, the Financial Services Commission (FSC) will decide whether to designate our facial payment as an innovative financial service,” he said, sounding optimistic about the financial regulator's forthcoming decision.
According to the FSC, providers of innovative financial services are immune to diverse financial regulations and have exclusive rights for their services for two years after they get approval.
Shinhan Card, which has run “Shinhan Face Pay” at the cafeteria, coffee shop and CU convenience store inside the company's headquarters since August, will allow customers to use the system at universities starting from November, given that they are closed communities with many early adopters.
Ryoo emphasized that Shinhan Face Pay does not infringe on privacy.
“Unlike China's facial payment system collecting original images, our system only stores key points of images, so it is free from privacy issues,” he said.
“Our Face Pay also features age tracing algorithms that means our customers using the system do not have to submit a new photo for 10 years.”
Another technology that Shinhan Card employs is a blockchain-based payment system.
The card issuer obtained a patent for the system in Korea, being the first in the world to have established a credit transaction service using the new record-keeping technology.
It applied for patents in five other countries and one trading bloc ― the U.S., China, Japan, Vietnam and Indonesia, and the European Union. Decisions on these will be made in 2020.
“With our system, we provide our customers with cryptocurrencies available at our affiliated stores, in accordance with their credit limits,” Ryoo said.
“Cryptocurrencies developed by other blockchain companies can only be used at a limited number of stores. Ours can be used at a wider range of places, because we have served as a platform for our customers and affiliated stores for over the past 30 years.”
The executive also said the combination of blockchain and IoT technologies will accelerate the end of plastic.
“We installed our payment module in products from Hyundai Motor and LG Electronics,” he said.
“Our customers will be able to do grocery shopping with LG ThinQ refrigerators. This means that products themselves become our affiliates. If the nation's manufacturers pay more attention to cooperation with financial firms, the pace of innovation will be much faster.”