Mobile payments app CHAI is using blockchain technology to provide cheaper transactions for local businesses in Korea. So far, the CHAI app has facilitated $54 million worth of transactions via the Terra blockchain in its first four months of operation.
The app uses stablecoins—cryptocurrencies with prices pegged to fiat currencies, such as the US dollar—to provide cheaper transactions, and passes the savings along to its users. These are only used on the app's backend and the actual users don't see that it is using stablecoins. It claims that using blockchain technology has saved merchants $810,000, based on estimated fees charged by traditional payment providers.
Daniel Shin, co-founder of Terra said in a press release, “Korea is quickly becoming the prime example for how we can innovate payments around the world.”
Korean-based CHAI is the first mobile payments app to utilize the Terra network, a platform that enables anyone with a bank account to make payments using blockchain technology. CHAI said that payment fees are “as low as 0.5 percent, as compared to the 2.5 to 3 percent most traditional payment providers charge.”
So far, it appears to have been working; since launching in June this year, the mobile payments app has already reached 500,000 users.
CU—Korea’s largest convenience store chain—plans to add support for CHAI across its 14,000 physical locations by December 2019, according to the press release. By the first half of 2020, CHAI also plans to launch a physical payment card for its customers, which will enable a large portion of both online and offline transactions to be powered by the Terra network.
The mined token of the Terra network, LUNA, has a current market cap of $140 million, with around $1 million worth of tokens traded on exchanges each day. Since the token started trading in June this year, the price is down 74% from an initial high of $1.82 to its current price of $0.48. But by using stablecoins, CHAI neatly sidesteps this problem.