South Korean payment company Shinhan Card is preparing to test blockchain-based offline payments with Dunamu, the operator of the digital asset platform Upbit. The trial will run on the Kiya Chain public blockchain and its companion Kiya Wallet application, and marks the first time a South Korean card company has tested Kiya Wallet in a real-world payment environment.

The initiative is designed to assess whether blockchain-based digital tokens can support convenient in-store payments while meeting the security and operational requirements of financial services. Participating Shinhan Card employees will make offline purchases using company-issued tokens on Kiya Chain, with QR code payments intended to deliver an experience similar to conventional mobile payment services.

The test will take place at a merchant located on the first basement level of Shinhan Card's headquarters in Euljiro, central Seoul. Participation will initially be limited to employees, allowing the two companies to evaluate the payment process in a controlled environment before considering broader deployment.

Under the arrangement, Shinhan Card will handle token issuance and the operational aspects of the pilot, while Dunamu will support the underlying blockchain network. The collaboration will examine how the two companies can combine established payment operations with blockchain-based transaction infrastructure.

QR Codes Simplify Payments

The pilot aims to reduce the complexity commonly associated with transferring digital assets. Participating employees will receive tokens through the Kiya Wallet application and complete purchases by scanning a QR code displayed at the merchant's location, removing the need to manually enter a wallet address or initiate a separate token transfer.

This design could make blockchain-based payments more accessible to users who are familiar with mobile payment applications but have limited experience with digital wallets. By connecting token distribution, wallet access, and merchant payments through a single process, the trial will examine whether public blockchain infrastructure can support practical retail transactions without introducing unnecessary steps for customers.

The initiative also offers an opportunity to assess transaction processing and the operational requirements involved in using blockchain tokens at physical retail locations. However, the initial employee-only test does not establish whether the system is ready for public use or large-scale merchant adoption.

On-Chain Authentication Targets Payment Security

Security is a central component of the project. The companies will use Kiya Chain's on-chain authentication technology, known as Dojang, to verify that a payer is an authorized Shinhan Card employee. The system restricts transaction permissions to pre-registered wallets, helping prevent unauthorized users from making payments through the pilot.

The companies also plan to examine the security controls and compliance requirements necessary for financial services that rely on blockchain infrastructure. By combining wallet-based authentication with transaction permissions, the pilot will assess how blockchain technology can support controlled access and reduce the risk of unauthorized payments in a real-world retail setting.

These measures are particularly relevant for financial institutions blockchain-based payment services, where convenience must be balanced with identity verification, transaction security, and regulatory obligations. The trial's findings could help determine which safeguards are necessary before similar services are extended to additional users or merchants.

Shinhan Card Expands Blockchain Payment Research

The pilot builds on Shinhan Card's previous work on six proof-of-concept projects involving stablecoins and blockchain technology. Unlike those earlier proof-of-concept efforts, this pilot tests blockchain payments in a real-world retail environment. The company has also collaborated with international organizations, including the Solana Foundation and Japan's SBI Group, as it explores Web3-based payment applications.

The initiative reflects a broader effort by financial institutions to investigate how blockchain networks and digital tokens could complement existing payment systems. Potential applications include programmable payments, digital asset transfers, and new settlement arrangements for merchants and consumers.

According to the announcement, Shinhan Card expects the pilot to help establish a foundation for future blockchain-based financial services. The company intends to use the results to prepare for potential commercialization following the completion of relevant legislation. It also plans to gradually expand the number of participating merchants and explore connections with global blockchain networks.

The project's commercial prospects will depend on the results of the trial, the development of an appropriate regulatory framework, and the ability to maintain a secure and straightforward payment experience. For now, the collaboration represents an early test of how public blockchain technology and digital wallets could be integrated into South Korea's existing retail payment infrastructure.

Source: Shinhan Card, Dunamu Test Blockchain QR Payments in South Korea (CoinTrust)