[THE INVESTOR] Despite the meteoric rise in bitcoin’s value, major payment providers remain skeptical it will be widely accepted as a new payment method.
“It will take some time for bitcoins to be used as currency,” said Andrew Park, manager director of Visa Korea during a panel discussion at the Inside Fintech Conference and Expo held at KINTEX in Goyang, on the outskirts of Seoul. “Unlike everyday money that is issued and controlled by the central bank, cryptocurrency is decentralized and circulated between individuals.”
“The bitcoin’s value has fluctuated and has reached US$10,000. But it’s still far away from becoming a currency with practical use. If the central bank accepts it as a currency, that’s a different story, but for now, it will take a while.”
Hong Kong-based AsiaPay’s chief also raised skepticism about the cryptocurrency as a payment platform.
“One of the challenges for cryptocurrencies is to prove to the central bank that they can validate the payers, to validate who making the payment and receiving it,” said Joseph Chan, AsiaPay CEO. “Also, different markets today have different jurisdictions. Some markets have greenlighted it like Japan while there are some red lights like in China.”
Domestic mobile payment provider Kakao Pay said it is closely watching the cryptocurrency market, but at the moment, has no detailed plans.
“Through providing authentication process for the cryptocurrency exchange Upbit, we are closely observing the market,” said Na Ho-yeol, CTO at Kakao Pay.
Upbit is a cryptocurrency exchange launched in Oct. by fintech startup Dunamu, a Kakao affiliate, that supports over 110 cryptocurrencies, including bitcoin and ethereum.
As for blockchain, bitcoin’s underlying technology, experts are keen on developing and implementing the buzzword technology in its payment services.
Credit card giant Visa is developing a prototype for blockchain-based payment system for businesses to be used between big banks and institutions. “We are utilizing the technology through strategic partnerships or M&A with blockchain developing firms,” Park said.
For internet giant Kakao, it has already adopted blockchain technology for its authentication process that enabled Kakao Bank with easier and more secure identification.
“Since 2015, Kakao has been interested in blockchain,” Na said. “We launched the Kakao authentication, which is already used by many institutions, making it easy for money transaction and electric signature for important documents. Recently, we have been carefully looking into blockchain-based smart contracts.”
AsiaPay is also focusing on blockchain, as well as big data and biometrics to bring advanced technology into its payment platform. The payment provider is considering launching services in Korea next year through possible partnerships with local players NHN KCP and Samsung Pay,
The Inside Fintech Conference & Expo, one of the most influential fintech events in the region, kicked off its two-day run on Nov. 30, bringing industry leaders from global tech firms and financial institutions to Korea.
Over 2,000 experts from 35 countries, including Google, Visa, Microsoft, HSBC, IBM and other top-tier firms gathered at the event to discuss blockchain technology, as well as various fintech innovations.
By Ahn Sung-mi (Sahn@heraldcorp.com)