'Blockchain-based payment benefits e-commerce and consumers'

By Baek Byung-yeul

Daniel Shin, co-founder of Terra

Daniel Shin has seen his name in media frequently after he established the country's first social commerce site Ticket Monster (TMON) in 2010.

After taking an interest in blockchain technology, an emerging paradigm shift comparable to the rise of the internet, Shin devoted himself to the blockchain industry and founded Terra, a blockchain-based payment service company, in April 2018.

Blockchain-based payment systems may still be somewhat unfamiliar for many people, but Shin said he believes it can benefit both e-commerce service providers and consumers.

“I decided to launch the blockchain-based payment service with my colleagues because it can benefit both the e-commerce service providers and consumers,” Shin told The Korea Times during a recent interview.

“One of the problems that e-commerce companies are facing is a payment gateway (PG) fee. Whenever transactions are made, they have to pay a transaction fee of between 2 percent and 3 percent to PG service providers, which is a huge cost to the e-commerce firms,” he said. “By providing a more secure transaction system with a transaction fee of 0.5 percent, the e-commerce firms can reduce PG costs significantly.”

By using its digital token, the blockchain-based payment system can encourage e-commerce platforms to offer incentives or discounts to their consumers, the co-founder added.

To create a stable ecosystem, Terra has assembled an alliance of e-commerce platforms in Asia. This includes Korea's TMON, food delivery app operator Baemin and hotel booking app operator Yanolja, as well as Singapore-based e-commerce platforms Qoo10 and Carousel, Vietnam's Tiki and Thailand's Pomelo.

Its business potential is being recognized and Terra has attracted venture capital from firms including Kakao Ventures and Singapore-based LuneX Ventures. “Our goal is to grow Terra with annual transactions of $150 billion by 2022,” he said.

Shin said Terra's blockchain-based payment system could be a game changer in the e-commerce industry.

“Some newcomers would offer lower transaction fees, but there weren't many alternatives once you took into account key aspects such as sustainability, stability, trust, security, speed and convenience. But what if you could utilize blockchain technology to reduce intermediaries and create a payment system that is safer, faster, more convenient and of course cheaper? That could be a game changer for many e-commerce companies,” he said.

Shin added Terra's next business destination will be Mongolia as the company is planning to introduce the peer-to-peer mobile payment system in the landlocked country.

Terra already signed a memorandum of agreement with Ulaanbaatar, the capital of Mongolia, in January to form a taskforce team to establish mobile payment infrastructure.

“In collaboration with the Mongolian government, we have been pushing forward with the plan to introduce the peer-to-peer mobile payment system there. The majority of Mongolians are still using cash for payments, but we expect a growing number of Mongolians will use mobile payments,” Shin said.