Blockchain Can Eliminate Credit Card Fraud
01 Jul 2019
Credit card fraud is a significant risk whenever you get a card these days. Anyone who has a credit card has likely heard about the issue or has been affected by it directly. In a story on IT news, it found there were 177,000 scam reports in Australia last year, costing Australians half a billion dollars, compared with 85,000 scam reports in the United States and Britain combined.
Banks were often blamed for such scams, because Australia had no clear framework for deciding who was responsible for such scams, and banks took different approaches when compensating customers.
In Australia, US-based credit card and payment schemes have heavily resisted the entry of regulators into the payments security space, arguing they are best placed to defend their own global networks with a variety of risk-based authentication methods. But if recent news is any indication, new methods and strategies are required.
Only recently, Westpac had the private details of almost 100,000 Australian bank customers exposed in a cyber-attack on the real-time payments platform PayID, which allows the instant transfer of money between banks using either a mobile number or email address.
The greatest amount of pressure now being applied to banks by regulators is for, card-not-present (CNP) fraud that is essentially online transactions made with a stolen credit card and scheme debit card (Visa, Mastercard or American Express).
As attacks and fraudsters increase their sophistication and continue to target consumers there has to be another way to fight credit card fraud.
At VeriDoc Global, we believe we have the solution.
The solution allows a user to “time activate” their credit card before making a purchase. While the credit card is not “activated”, it cannot be used to make purchases, including non-present transactions. This gives control back to the bank and the customers.
A time stamp and location stamp of each “activation” is added to the blockchain for audit purposes. If a user claims to have lost their credit card or mobile phone or both, the time and location of each “activation” are available for forensics and insurance.
Banks have total control of the credit cards that they issue and can technologically disable the QR code from being verified after a credit card has expired or if the credit card is compromised.Anyone who finds or steals the credit card cannot use it to make purchases because there will be no way for them to “time activate” the credit card.
Each credit card has a QR code that is linked to a unique hash value and a registered owner.
The owner scans the VeriDoc Global secured QR code on their credit card using a VeriDoc Global Powered mobile app (or bank app) to “time activate” their credit card before making purchases.
The VeriDoc Global powered mobile app allows banks and lenders to have 100% control over the QR codes that can be verified and time activated. The app blocks all other QR codes, including those used by counterfeiters who are trying to replicate the verification process on their own servers.
Stolen credit cards can lead to thousands of dollars’ worth of spending before the card holder realizes their card has been compromised. Card not present transactions (online shopping), poses a risk to credit card holders if their credit card details are stolen or compromised due to hackers attacking merchant or bank platforms. Credit card skimming, checkers, phishing and a range of other illegal activities pose a risk to credit card holders.
The effects of credit card fraud continue to trouble banks, lenders and their customers today, but blockchain can be used to help credit cards retain their authenticity in a global market as the world changes.
Banks can leverage the technology of blockchain while protecting their customers from credit card fraud.
It's a simple but elegant solution to a real problem that exists today.
To learn more about VeriDoc Global’s software and how it can be of benefit to you or your organization, please visit our website at www.veridocglobal.com
Content is written by Greg G.