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Korbit launches Hyphen to provide cross-border payouts powered by blockchain tech

South Korea’s first bitcoin exchange and blockchain remittance provider is expanding into a more robust role offering APIs to other companies at very low fees.

Established in April 2013, Korbit is Korea’s first Bitcoin Exchange and a provider of blockchain-related services. The company announced a new service yesterday, Hyphen, which they describe as “an aggregator for cross-border payouts settled via distributed ledgers.”

The description does the service little justice, however. In effect, Hyphen replaces a lot of what we use banking for today but uses the blockchain and a robust, public API. Designed for enterprise use, Hyphen was made to be plugged into the back-end of online marketplaces, consumer apps and financial services.

There are many use cases for Hyphen; Remittances can be sent through it, all the way to the recipients’ ATM machine; Businesses can use it to mass-pay their employees, all around the globe; Freelance marketplaces, like Upwork or eLance, can use it to pay their earners; The service can also be used for reward programs.

Although the service has a blockchain backbone, users never have to exchange any cryptocurrency nor worry about volatility risk. Recipients of Hyphen powered payments get to choose between a bank transfer and an ATM cash pickup, and the sender pays the flat one percent fee. In a lucrative twist, Hyphen also claims that the platform passes on arbitrage opportunities to the client, “which can lead to FX rates that are better than the actual ‘mid-market’ rates.”

With limited resources to achieve geographic coverage, the service is only available in 24 countries and six currencies are supported at this time. The US, China, most of Europe, Australia, the Philippines, and of course, South Korea are covered, but the largest market for remittances, India, is missing for now. “We had to vet, and get vetted by, each local payout partner to ensure compliance with local laws and regulations,” said Tony Lyu, Korbit’s CEO.

While there are a lot of bitcoin-to-cash payout services, and a lot of potential payout partners, “there was no cost-effective way to piece them together,” said Tony Lyu, Korbit’s CEO. Korbits solution is to communicate with a multitude of APIs, which Hyphen bundles into a single API for payments.

Korbit revealed that several companies, including one of the largest mobile payments apps in Korea, have begun integrating Hyphen into their settlement workflows. The company expects the more clients to use the network when the service goes live, in March.

Tony Young Suc Lyu“We act as an integration partner for companies looking to make cross-border payments on this new, evolved value-transfer rail. It’s not as glamorous as being the brand that interfaces directly with the end-users, but someone has to do the plumbing work.”
—  – Tony Lyu, Korbit CEO

In addition to Hyphen, and the original Korean exchange, Korbit has launched several other products. The company has raised over US$3.6 million in funding from a group of investors including Softbank Ventures Korea, Pantera Capital, Digital Currency Group, Tim Draper and Naval Ravikant.

The Korbit team created Bitwire in July 2015, so that anyone can send money to a South Korean bank account. Transfers are processed and settled in less than two hours and Bitwire charges no fees. Korbit claims to have processed over US$100M through the service.

Korean remittances 2015According to the World Bank, South Korea has a population of over 50 million people and a GDP of US$1.4 trillion. Remittance inflows were US$6.48 million in 2014, which represents 0.46 percent of GDP while outflows were US$9.55 million, representing 0.68 percent of GDP.

The South Korean eCommerce sector has also been growing rapidly, largely due to mobile purchases. However, online banking is still cumbersome due to laws that require extra security software and required now-obsolete ActiveX plugins.

The South Korean government passed a law in the late ’90s facilitating e-commerce security that required the use of ActiveX, a software framework released by Microsoft in 1996. Because of this law, and only because of it, Internet Explorer is always a requirement when it comes to online purchases and online banking in Korea.

However, laws can and often do change. The South Korean Ministry of Science, ICT, and Future Planning, announced a plan to remove 90 percent of ActiveX from e-commerce websites by 2017.

E commerce in Korea 2015According to an independent report from Worldpay, released in November 2015, Credit Cards are by far the most common form of payment  in South Korea. However, the report predicts that credit card’s dominant position will weaken over the coming years, as alternative payment methods grow from a current 17% of online payments to 27% by 2019.


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