"Opportunity or Threat?"... Card Companies Embrace On-Chain Technology

Stablecoins Become a "Future Growth Engine"
Connecting Real-World Payments via Merchant and Authorization Capabilities
Moving Beyond Joint Pilots Toward Actual Commercialization

As stablecoins are emerging as a new payment method that can bypass existing card networks, card companies are accelerating their efforts to maintain their dominance in the payments market. Their strategy is to combine on-chain technology with their established infrastructure for member and merchant management, approval, and settlement, in order to become key operators that connect stablecoins and real-world payments.

According to the financial sector on July 30, as stablecoin payment volumes are expected to grow substantially enough to pose a threat to the existing card network, major domestic card companies recently presented stablecoin business as a key future growth driver during their first-half earnings announcements. Shinhan Card announced plans to expand collaboration with the group’s digital platform, “New Super SOL,” and to strengthen its own capabilities to respond to stablecoins. Samsung Card also identified stablecoins and artificial intelligence (AI) as drivers of future growth. KB Kookmin Card plans to expand external partnerships in the “New Payment” sector, focusing on stablecoin and digital asset-linked payment technologies.

The backdrop to these stablecoin response strategies from card companies is a sense of urgency that stablecoins could fundamentally alter the structure of their payment businesses. Stablecoins allow individuals and companies to transfer funds directly via blockchain, which may reduce the number of procedures passing through established card networks.

However, simply holding or transferring stablecoins does not complete an actual payment service. Functions previously handled by card companies, such as customer identification, merchant management, cancellations and refunds, fraud prevention, and anti-money laundering (AML) compliance, are still essential. Card companies are seeking to leverage their expertise in payment operations to act as connectors between stablecoins and regular merchants.

This concept has led to industry-wide technical validation. The Credit Finance Association recently completed a joint proof-of-concept (PoC) for stablecoins in partnership with Lambda256, a blockchain-specialized firm. This PoC covered the entire payment process, from stablecoin issuance and distribution to payment approval, cancellation, refund, and settlement. Observers note that, once the regulatory framework for stablecoins and the scope of card companies’ work becomes more clearly defined, these efforts may lead to real business opportunities.

Similar developments are taking place in the global card industry. On July 16, Visa unveiled its “Visa Stablecoin Platform (VSP),” which allows financial institutions, fintech companies, and virtual asset companies to manage stablecoin issuance, custody, and remittance. Visa stated, “VSP integrates with services such as stablecoin payments, linked cards, and remittances. Building on these features, VSP will help financial companies enter the on-chain space and enable virtual asset platforms to leverage Visa’s global network.”

An industry insider said, “To gain competitiveness in the stablecoin market going forward, card companies must identify their strengths in areas like issuance and distribution and develop specific business models that combine existing infrastructure with on-chain technology. To advance toward actual services, it will be necessary to clarify the scope of card companies’ digital asset work, establish clear settlement criteria for merchants, and simultaneously put in place consumer protection systems.”

This content was produced with the assistance of AI translation services.