How is Blockchain Technology cut down on credit card frauds

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Slide 1

Blockchain – The New Age Hack for Credit Card Fraud In the cashless economy, the common man, traders and business professionals have switched to alternative modes of payments. Like the liquid cash, Digital transactions are also tampered by unwanted elements in the cyber space. In an attempt to safeguard customers from credit card frauds, the RBI has revised its guidelines and ruled out strict penalties. In a report to the Nations on Occupational Fraud and Abuse issued by the Association of Certified Fraud Examiners (ACFE), the total loss caused by fraud events in 2016 exceeded $6.3 billion, with an estimated 5% loss of annual revenues in a typical organization.

Slide 2

Credit card fraud and fake identities have been listed in the Top 10 Operational Risk of 2017 in a publication by Rish.net. In the modern-day world, technology has been evolved that can eliminate the risk of frauds – The Blockchain Technology.

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What is Blockchain Technology? Putting in simple terms, Blockchain is a decentralized ledger, shared among the stakeholders of a business relationship. It is a well-secured environment wherein, only verified users can update, view and share critical information digitally.

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People versed in cyber technology coin it as cryptocurrency – a technology that is transparent and not controlled by any single unit. Executives and economists have studied and found that the GDP is bound to increase over 10% with the use of this technology. How is Blockchain Technology cut down on credit card frauds? Bank-to-bank transactions can also be a threat. Such systems are vulnerable to cyber-attacks and account up to frauds worth $20 billion dollars every year.   Blockchain technology has a simple implementation in credit card transaction. The process flows as :

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- A wants to send money to B - The transaction is represented as a ‘block’ - Blockchain is broadcasted / notified to both the parties - The parties verify it to be valid - The block is then added to the chain of transactions where payment is recorded - Money from source A moves to B   Thus, eliminating the chance of operational theft by third party, or denial of transaction from the parties involved. This technology holds records and electronic documents jointly shared by the parties. The digital space gives an option to the stakeholders to float smart contracts to share the proceedings and manage the dealings. Any update, modification or deletion will only be carried out with the permission and verification of trading parties involved.

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The convergence of trading finances and cryptocurrency has created an altogether real-time, publically verifiable set-up. It is the best solution to combat issues like round tripping in accounts, channel stuffing, currency or revenue irregularities. In case of breach of security, it is viable for forensic accountants to track and examine the actions of the unauthorized party in the network.

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The technology focuses on creating a global network of digital currency that is transparent, speedy and secure by all means. Lisa Ellis, the senior analyst at Bernstein, ranked top payments analyst by Institutional Investor believes that Blockchain is getting a tremendous amount of momentum independent of bitcoin in core banking.   Stay tuned to our Facebook Page, LinkedIn Profile to get the immediate access to the latest updates.   For more information visit us @ http://hyperblock.in/

Summary: Bank-to-bank transactions can also be a threat. Such systems are vulnerable to cyber-attacks and account up to frauds worth $20 billion dollars every year.

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