LG Uplus has joined with global partners in Japan, Taiwan and the United States to offer subscribers a blockchain-based overseas payment service.
The trial service, scheduled to start early next year, is based on a cross-carrier blockchain platform called CCPS (cross-carrier payment system), enabling subscribers from one carrier to complete purchase transactions on the payment networks of another carrier.
It would mark the first time a Korean mobile carrier has offered such an advanced service to subscribers.
Seoul-based LG Uplus signed a memorandum of understanding (MOU) Thursday with Taiwan-based Far EasTone Telecommunications and Japan-based SoftBank for the new service. U.S.-based TBCASoft will provide the cutting-edge blockchain platform.
Once the service is launched, LG Uplus subscribers will be able to buy things at selected retailers using their mobile phones when they travel to Taiwan and Japan.
Far EasTone subscribers will also be able to enjoy the same convenience when traveling to Korea and Japan.
The service uses direct carrier billing, enabling transactions to be billed and paid through their carrier in their home currency.
With the service, users can avoid fees on overseas credit card transactions, the U.S. firm said, noting that CCPS, which provides a prompt settlement mechanism in cross-carrier services, also reduces the risk associated with fluctuations in foreign exchange rates.
Far EasTone, SoftBank and TBCASoft are among the initial founding members of the Carrier Blockchain Study Group (CBSG), the global blockchain consortium of telecom carriers.
Launched in September 2017, the consortium is aimed at enabling the joint development of an innovative blockchain platform designed specifically for telecom carriers.
The CBSG also seeks to provide telecom members and their customers various services such as secured global digital payments, clearing and settlement, personal authentication, IoT applications and other services using blockchain technology.
Korea’s third-largest mobile carrier became a member of the consortium in February.
“Customers will have the benefit of an overseas payment system based on convenient, economical and secure blockchain technology,” said Joo Young-joon, director of the mobile service unit at LG Uplus. “And in addition to the overseas payment solution, LG Uplus will continue to develop new business opportunities with CBSG blockchain and global telecom leaders.”
For his part, Ling Wu, founder and CEO of TBCASoft, and co-chairman of the CBSG Consortium, said: “As the CBSG Consortium grows faster than expected, we are entering a new stage of launching real world trials that demonstrate the commercial readiness of the TBCASoft blockchain platform.”
He said the cross-carrier payment system is the first in a series of blockchain-based systems, adding that identity and authentication are next.
Blockchain refers to a peer-to-peer network in which many people participate to provide computing power for the security of the decentralized system. It has a built-in payment system _ well-known examples are those involving bitcoin and Ethereum.
Unlike conventional systems, blockchain does not need third-party intermediaries. It therefore has no single failure point, which is why blockchain is safer than middlemen-backed old institutions like banks, brokerages and governments.
It is practically impossible to hack the system because of its unique structure and great computing power offered by distributed users.