KFTC President Park Jongseok: "QR Payment Hub System to Be Established in Indonesia and Vietnam This Year"

Direct Connection Between Payment Institutions Across Countries, Lower Fees and Greater Convenience
Support for Overseas QR Payments and Cardless ATMs
Strengthening Global Competitiveness of Korean Banks and Fintech Firms

The Korea Financial Telecommunications and Clearings Institute (KFTC) will establish a hub system for inter-country linkage of small-amount payment services in Indonesia and Vietnam within this year, launching overseas QR payment services and more.

Jongseok Park, President of the Korea Financial Telecommunications and Clearings Institute, explained to reporters on the 6th (local time) in Milan, Italy, about the hub system for inter-country linkage of small-amount payment services. Korea Financial Telecommunications and Clearings Institute

On the 6th (local time), Jongseok Park, President of KFTC, told reporters in Milan, Italy, where he was attending the Asian Development Bank (ADB) Annual Meeting, "We are building an open hub system in cooperation with payment institutions and central banks in Asia, so that financial companies and fintech firms can connect a variety of cross-border small-amount payment services more conveniently and at lower cost." To this end, KFTC is working on direct connections with institutions such as Indonesia's leading payment provider, ASPI System.

Recently, in the global payments market, there has been a trend toward direct linkage between major payment systems and the activation of mobile payments. KFTC, which operates Korea's domestic small-amount payment system, is working to build a hub system that connects overseas payment institutions with domestic financial companies and fintech firms. Through this, KFTC plans to support mobile-based small-amount payment services such as 'overseas QR payment', which allows users to scan QR codes at overseas merchants with a mobile application to make payments, and 'cardless ATM', which enables users to withdraw local currency from overseas ATMs using a mobile app without a plastic card.

President Park stated, "We will establish a direct connection system between payment institutions so that Korean travelers can make QR payments overseas with just their mobile phones, even without a credit card." He added, "After Indonesia and Vietnam this year, we plan to expand the number of connected countries by cooperating with member states of the Asian Payment Network (APN) and others in the region."

He emphasized, "The hub system will help ten KFTC member banks, as well as other domestic financial companies and fintech firms, provide more competitive services. This will also strengthen their global financial competitiveness." The hub system infrastructure will enable financial companies and fintech firms to provide services to customers at lower costs. Currently, when using the infrastructure of global card networks such as Visa and Mastercard for overseas payment and cash withdrawal services, the transaction fee is around 1% of the transaction amount. By utilizing the hub system infrastructure, these costs can be significantly reduced. President Park stressed, "We will open this infrastructure to any operator with the appropriate license, thereby lowering the entry barriers for cross-border payment services."

KFTC is also preparing the 'TrustOne' service, which allows users to authenticate credit and debit cards, separated from mobile devices, by tapping them on a mobile device to ensure the safe use of mobile-centric financial services. The system uses an 'OTAC applet' embedded in the physical card's IC chip, separated from the smartphone, enabling user identification with just an authentication code. When making a payment, the card generates a code that can be tagged to the smartphone for authentication. President Park explained, "Without the need for OTP or other devices, users can simply keep their cards in their wallets and authenticate by tagging them, enhancing security by using credit or debit cards separated from the smartphone." He added, "We are currently working with BC Card and other banks and card issuers, and once this service is launched, it will help address many of the financial security issues that arise from mobile-centric payment systems."