Shinhan Bank, GS Caltex partner to develop simple payment service

(Shinhan Bank·GS Caltex)

Shinhan Bank Co. and GS Caltex Corp. have joined hands to develop a digital payment service with a prepaid function, highlighting a growing partnership between a financial and non-financial firm.

According to industry sources on Sunday, Shinhan Bank is building a dedicated digital payment application for GS Caltex, enabling customers to use the app at both online and offline affiliated locations.

In addition to using GS Caltex membership points, users can pre-load funds to make payments anytime.

The app will integrate with open banking, allowing users to recharge and request refunds within the platform.

Customers without a Shinhan Bank account will be able to deposit funds via a virtual account service. The launch date has not yet been decided.

As the digital payment market gains traction, non-financial players are entering the digital payment sector, leveraging banking technology and infrastructure to expand their payment options.

The GS Caltex service is expected to incorporate Shinhan Bank‘s Shinhan Partner Pay solution, which was developed in 2023 to offer customized prepaid payment systems for corporate partners.

Shinhan Bank has already been operating a solution-based payment service with Eland Retail Ltd. since May.

The collaboration is part of a broader trend in banking-as-a-service (BaaS), which allows licensed banks to offer payment solutions to third parties without requiring additional licenses, earning service fees in return.

For GS Caltex, the partnership provides a streamlined way to implement a digital payment system without needing to acquire licenses for electronic financial services or payment gateway services, reducing setup and operational costs.

GS Caltex will also benefit from Shinhan Bank’s extensive customer base of over 10 million monthly active users, broadening its member recruitment and gaining an indirect promotional boost through Shinhan Bank’s app.

Shinhan Bank is expected to gain access to GS Caltex’s wide customer base, opening a new channel to reach retail clients and creating fee-based revenue.

As banks increasingly seek to grow non-interest income, BaaS presents a valuable business model, experts said.

Meanwhile, KB Kookmin Bank is working on a similar project with S-Oil Corp. with a payment app that links to various bank accounts via an open banking system.

Unlike the Shinhan-GS Caltex app, the Kookmin-S-Oil app is expected to not include a prepaid feature but will support account linking for seamless payments.