NHN KCP and Avalanche Unveil Stablecoin Payment System with 2-Second Approval and 1-Hour Settlement

Payment and Overseas Remittance Demonstration via PAYCO App

Verification of Payment and Automatic Settlement through 2,300 PoCs

NHN KCP and Avalanche (AVAX) have unveiled a stablecoin payment, settlement, and overseas remittance infrastructure based on PAYCO. The two companies completed a proof of concept (PoC) that reduces payment approval time to under 2 seconds and shortens merchant settlement cycles to 1 hour. They plan to expand their business into the B2B payment market while maintaining a user experience similar to existing easy payment methods.

On the 23rd, NHN KCP and Avalanche held the 'NHN KCP x Avalanche Stablecoin Demo Day' at NHN KCP's headquarters in Guro, Seoul, where they first showcased the jointly developed payment infrastructure. The event demonstrated stablecoin payments, automatic settlements, and overseas remittance technologies.

Participants received stablecoins through the digital wallet integrated into the PAYCO app and used them to purchase online products and coffee. They also experienced the process of checking order and settlement details on the merchant management screen and remitting stablecoins to overseas wallets.

Payments Without Blockchain Knowledge

NHN KCP CEO Park Jun-seok emphasized that the competitiveness of blockchain payments lies more in user convenience than in technology.

He stated, "What matters is not how excellent the blockchain technology is, but how easily customers can use it. No matter how superior the technology, if it is difficult to use, it will struggle to gain market acceptance."

He added, "Users do not need to learn a new blockchain service; it is designed to be as natural as using existing PAYCO easy payments."

He mentioned that they have been planning the service for about a year and have been developing it for over six months, focusing on creating a payment experience that does not require awareness of blockchain technology.

The digital wallet is integrated into the PAYCO app, and there is also a corporate wallet that can be customized to fit business environments. It is structured to be applicable to specific stablecoins or services without being dependent on them, tailored to the needs of individual companies.

Previously, the company announced a joint development of a payment-specialized mainnet based on AvaCloud with Ava Labs in April. The two companies plan to expand their business to include ultra-fast payment approvals and on-chain encryption technology, tokenized deposits, multi-stablecoin settlements, and global B2B payments.

The stablecoin payment proof of concept (PoC) was conducted from May to June with 700-800 employees from PAYCO and the company.

Participants made approximately 2,300 payments using the PAYCO app for online gift cards and at offline cafes and restaurants. The average time taken for blockchain verification and payment approval after scanning the QR code was under 2 seconds.

The company explained that they aimed to develop a system where users do not perceive delays compared to existing PAYCO payments. They plan to enhance performance to ensure that payment times do not exceed 2 seconds, even with the addition of other blockchains and stablecoins.

The speed of merchant settlements was also a key verification target.

Currently, it typically takes several days for merchants to receive actual funds after card and easy payments. By applying the real-time transaction finality of blockchain and smart contracts, they implemented a structure that calculates and automatically delivers the settlement amount on an hourly basis.

During the PoC period, they transmitted a total of 418 settlement data to actual offline merchants to check the system's stability. Although they are not yet at the stage of paying actual fiat currency every hour, they confirmed that hourly automatic settlements are technically feasible.

CEO Park stated, "As the settlement cycle shortens, the turnover speed of the merchant's operating funds increases," adding, "Using smart contracts, we can also implement a structure that automatically distributes a certain percentage of sales to raw material suppliers or partners."

What was unveiled this time is not just a wallet for users. An operational system that allows merchants and businesses to manage stablecoin payments was also introduced.

Merchant managers can check stablecoin orders, payments, cancellations, and settlement details on a screen similar to the existing card payment management page. Wallet managers can manage created wallets and asset movement statuses, while blockchain managers can monitor transaction processing speeds and network conditions in real-time. It is designed so that companies and merchants without blockchain expertise can operate it like existing payment systems.

The business scope does not remain limited to domestic payment networks. They are also developing overseas remittance and global payment infrastructure. After converting won-based assets in the PAYCO wallet to stablecoins, they have completed the technical implementation of sending them to overseas wallets and exchanging them for local currencies, excluding the areas handled by banks.

They are currently negotiating with banks and financial institutions for collaboration, and plan to expand services for overseas remittances and global merchant settlements once regulations and systems are established.

Avalanche: Barriers to Payment Expansion are Privacy, Speed, and Regulation

Nick Musalem, CEO of AvaCloud, diagnosed that there is a significant gap between the scale of stablecoin transactions and their actual payment utilization in a presentation themed 'The Next Century of Payments.'

He explained that while the scale of stablecoin transactions is expected to reach about $33 trillion by 2025, the proportion used for actual product purchases and remittances is around 1%. McKinsey estimated last year that the actual scale of stablecoin payments was about $390 billion, accounting for only a portion of total on-chain transactions.

Musalem identified privacy, processing speed, and regulatory compliance as key factors hindering the spread of stablecoin payments.

Public blockchains expose transaction histories, which can reveal sensitive information about a company's fund management, clients, and payroll to the outside world. Conversely, making transactions completely private complicates verification processes, slows down speeds, and makes it difficult for financial authorities or auditors to access necessary information.

Avalanche proposed encryption technology that proves only that encrypted transactions comply with regulations while keeping transaction details private, along with a 'selective disclosure' feature. General users cannot see transaction details, but only the necessary information is disclosed to financial authorities, auditors, and accounting firms designated by the company.

Musalem stated, "Existing compliance structures detected violations after the fact, while tokenized assets can set rules regarding holders, usage locations, and limits from the issuance stage."

He emphasized, "Transactions that violate the rules do not occur in the first place, rather than being detected afterward."

He also predicted that stablecoins would be used for AI agent payments.

Even if payment authority is granted to AI, by setting usage locations, limits, and available wallets for the stablecoin itself, it can prevent the agent from using funds beyond the permitted range.

Expanding into the Global B2B Payment Market

Kim Yong-il, head of Asia operations at Ava Labs, defined stablecoins as "programmable money."

He stated, "For businesses, the speed of fund turnover is more important than the payment itself," adding, "By utilizing stablecoins, we can create a structure that immediately settles merchant sales and automatically distributes them to suppliers and partners at predetermined ratios."

NHN KCP plans to solidify its payment and settlement business model in collaboration with financial institutions, platforms, and retail and commerce companies through this demo day. A total of 173 participants from 121 companies across 10 industries applied for the event.

The company will survey the demand for collaboration in stablecoin payments, corporate wallets, automatic settlements, and overseas remittances among participating companies. They are also considering forming regular forums to discuss not only business partnerships but also technology, regulations, and practical application cases.

CEO Park Jun-seok stated, "Based on the payment infrastructure that NHN KCP possesses, we will create a practical and realistic platform that connects Web3 and existing payment systems," expressing hope that this demo day will serve as a starting point for creating new business opportunities beyond just a technology demonstration.