South Korea’s Biggest Credit Card Issuer Unveils Blockchain System to Identify Counterfeit Goods

A 2019 report from the European Union Intellectual Property Office and the Organization for Economic Cooperation and Development (OECD) revealed that trade in pirated and counterfeit goods accounts for 3.3% of global trade. Based on data from customs seizures in 2016, the total value of counterfeit goods worldwide is $509 billion, up from $461 billion in 2013.

Fake goods, especially medical supplies, food, toys, car parts, electrical goods and cosmetic brands, present significant health and safety risks to the public. In addition, they generate billions of dollars in profit for the organized crime syndicates behind counterfeit trade. A major credit card issuer in South Korea is now turning to blockchain to help customers identify fake goods.

Shinhan Card, one of the largest credit card companies in this eastern Asia country and one of the top-five card issuers in the world, has launched a digital warranty service that uses blockchain technology to certify whether or not products are authentic. Dubbed Digital Warranty, the blockchain-based service will allow customers to prove the ownership and authenticity of products without fear of forgery or loss.

Announced as a trial service, Digital Warranty will be used by the first and second branches of an offline lightning market store, BGZT Lab. The service will use serial numbers, product information and appraiser information to identify a product’s distribution channel and determine its authenticity. Customers who purchase products from one of three Seoul-based BGZT stores will be able to scan a QR code on the product and receive a digital warranty.

They can then log onto Shinhan’s pLay app to determine whether or not the product was bought with a Shinhan debit or credit card. Customers who don’t use a Shinhan card to buy the product can use the blockchain-based warranty service via Shinhan Play. The credit card issuer has plans to expand the digital warranty service by partnering with manufacturers and distributors to develop a variety of blockchain-based payment services.

Shinhan Card’s Digital First Division head Yoo Tae-hyun says the introduction of a digital warranty service that leverages blockchain technology to prove product authenticity will allow the company to make used transactions more reliable and increase customer convenience. He said that Shinhan will use the decentralized ledger technology to improve customer experiences, with the company working to develop a variety of blockchain payment services for day-to-day life.

The South Korean company began its foray into blockchain in 2019 and became the first credit card issuer on the globe to receive a patent for a blockchain-based payment service in 2020.

Financial technology companies such as LQwD FinTech Corp. (TSX.V: LQWD) (OTCQB: LQWDF) are likely to see growing demand for their products and services as the benefits of blockchain technology become undeniably apparent to various industries.

NOTE TO INVESTORS: The latest news and updates relating to LQwD FinTech Corp. (TSX.V: LQWD) (OTCQB: LQWDF) are available in the company’s newsroom at http://ibn.fm/LQWDF

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