"I will establish an internet bank specializing in SMEs within 5 years"

[Interview] The Big Picture of Jin Kim, CEO of JikBank, Who Created the Service Transaction Payment System

Jin Kim, CEO of JikBank

"We aimed to solve the problems faced by small and medium-sized enterprises (SMEs) in service transactions, such as fraud and payment delays." Behind Kim Jin, CEO of JikBank, launching the service transaction payment system 'JikPay' lies the difficulties SMEs face due to accumulating unpaid receivables. Even when the ordering party made payments, it was common that the money did not reach the subcontractors, and structural issues with payment methods like promissory notes and cash repeatedly strangled SMEs. Ultimately, this sometimes drove companies to bankruptcy. CEO Kim believed that a secure payment system protecting the ordering party, suppliers, and subcontractors alike could break this vicious cycle. He is not stopping at solving this problem but envisions a bigger picture of innovating the entire SME financial service sector.

On the 9th, in an interview with Asia Economy, CEO Kim stated, "Our goal is to establish an internet bank specializing in SMEs within five years." His confidence in planning to establish an SME-specialized internet bank stems from the belief that the payment issues in service transactions across industries can be resolved through 'JikPay.'

JikPay is a payment model inspired by blockchain. The ordering party deposits money into a secure account at NH Nonghyup Bank and then issues 'tokens' that can substitute the deposit to the construction company. The construction company can use these tokens to pay subcontractors for material purchases or outsourced services. Once the work is completed, the tokens are settled into cash through the bank. CEO Kim explains that this system preemptively blocks problems of delayed payments and institutional issues with promissory notes, enabling transparent and simple transactions where the ordering party, suppliers, and subcontractors can all trade safely. Settlement is based on the deposited cash according to the project phase, eliminating the risk of losing money even if an intermediary company goes bankrupt. He said, "The system securely deposits the money given by the ordering party so it cannot be used elsewhere, and the bank pays the subcontractors or suppliers as the work progresses. Tokens can only be used for the specific project and expire once the project ends."

Underlying the JikPay service is CEO Kim's accumulated experience. Majoring in industrial design, he ran businesses in interior design, planning, and architecture for 15 years. During this time, he experienced the pain of promissory notes becoming worthless due to the ordering party's bankruptcy. Later, although he insisted on cash transactions, frequent payment delays revealed even greater risks. He explained, "Since companies only had promissory notes and cash as payment options, I wondered if this could be changed, which led me to start this business model."

JikPay is the result of CEO Kim's continuous efforts since founding the company in 2016. It has obtained two domestic patents for the payment system and big data construction and is pursuing overseas patent applications. Last year, the Financial Services Commission designated it as an innovative financial service, completing the legal and institutional preparations for the service, which officially started transactions in January this year. Last year, about 1 billion KRW worth of transactions were tested with around 30 companies, and after the official opening this year, about 200 million KRW in transactions occurred immediately. Although currently slowed due to the COVID-19 pandemic, CEO Kim expects demand to be limitless as service transactions are conducted across industries.

He said, "The primary target is the small-scale construction sector with transactions under 1 billion KRW, and then we will expand to markets beyond construction." CEO Kim added, "We have received feedback from users that the system is convenient and secure," and "It can reduce conflicts arising from transactions, contributing to economic revitalization." He also noted that some subcontractors are willing to bear commission fees to request JikPay secure payments from suppliers.

He believes that as transaction volume grows and participating companies' transaction data accumulates, a foundation will be laid to establish an SME-specialized internet bank. By analyzing accumulated data on which companies used tokens, for what purposes, and to what extent, the creditworthiness of companies can be derived. His first goal is to grow into a unicorn with a corporate value of 1 trillion KRW within three years. Subsequently, he plans to establish an SME-specialized internet bank by 2024.

CEO Kim also plans to expand JikPay overseas, as the problems arising in service transactions are no different abroad. He emphasized, "We will use the domestic market as a test bed and expand into China, Southeast Asia, and also establish a local corporation in the United States."

This content was produced with the assistance of AI translation services.