Blockcahin as a Solution to Payment Fraud

Visa's B2B Connect platform is a working example of how blockchain represents a viable solution to the finance industry. The platform which was launched in July 2019 was deployed in more than 30 markets and is built upon a private blockchain developed by IBM

Fremont, CA: With payment fraud increasing every day across business sectors, the finance industry has begun to look upon the emerging blockchain payment processing systems for a solution. Various organizations are now testing blockchain-based networks that hold the promise of making digital transactions more secure and efficient. Meanwhile, a few financial institutions like Visa and HSBC have launched their own blockchain-based payment platforms. What is more interesting is the fact that virtual currencies such as bitcoin, which are mined using blockchain networks are highly subject to fraud.

However, banks and payments firms are less interested in digital coins than they are in the technology that underpins them, which they believe could be harnessed in a host of different ways. At a grassroots level, blockchain is a shared and secure digital ledger that allows each component, or block, within a transaction to be tracked and approved by everyone who is subject to the deal. This helps create a digital paper trail that is irrefutable, more transparent and cuts out any room for manipulation. This could facilitate more secure transactional records for the transfer of almost any kind of asset, from cash and shares to property and insurance contracts.

“Blockchains help create public sources of truth, which means they reflect the one and only set of global transactions that are mathematically verified and secured. To that end, it becomes harder to cheat the system at the level of the actual data,” says Lex Sokolin, fintech expert at ConsenSys, a developer of solutions based on ethereum blockchain technology.

Visa's B2B Connect platform is a working example of how blockchain represents a viable solution to the finance industry. The platform which was launched in July 2019 was deployed in more than 30 markets and is built upon a private blockchain developed by IBM. This helps businesses to make faster cross border payments to each other. At the same time, it also promises to improve the protection of an organization’s sensitive data, including banking details and account numbers, sidestepping the vulnerabilities to fraud that exist when sending cheques, automated clearing house payments, and wire transfers.

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