Payment frauds and security threats are major nuisances towards the making of a digitalised payment ecosystem
Although digitalisation of the finance and payment system has been in full bloom even before the Covid-19 outbreak, the trajectory of the digital payment sector during the pandemic has gained high momentum. As per data published by the National Payments Corporation of India (NCPI), the number of UPI payment transactions doubled over a year, reaching 2.73 billion in March. On the contrary, the proliferation of digital payment apps comes with an exponential increase in the rate of digital payment fraud. A study published on Business Wire reveals that 71 per cent of customers were more concerned about the scams and frauds about online transactions.
There is no dearth of deception stories around transaction frauds online. ‘Request Money’, ‘Phishing’ and ‘Vishing’ scams are some popular mentions among some of the common types of cyber scams. Fraudulent phone calls, SMS, unauthorised SIM cloning activities, and cashback and refund scams have significantly shot up during the global health crisis.
Blockchain as a panacea to payment fraud
To prevent the occurrences of transactional cyber fraud, dual-factor authentication has proven to be a stringent payment protocol. Dual-factor authentication, also known as 2FA, uses a security token or biometrics as the first and second, different factor to verify a transaction. However, dual-factor authentication suffers from its drawbacks and falls short in front of sophisticated threat campaigns. Therefore, the need for using a highly encrypted mechanism for secure digital payment that remains stable even in the face of massive cybersecurity threats is the need of the hour.
In this context, cybersecurity experts, along with the new-age players in cryptography vouch for the development of the blend of blockchain with other technologies to uproot threats to transactional security. The development of integrated blockchain and sound technology comes across as a more compatible and internet-reliant solution, as it would require unimaginable computing power to hack into a block-chain protected system.
A Solution: Integrated blockchain and sound-wave technology
Blockchain works by creating a separate ledger and a public record of every transaction that takes place in the system. These ledgers are comparable to one another, thus making the chain of transactions traceable from the root. Moreover, if one node in the distributed ledger is preyed on, it can be recovered through the information contained in other nodes. Therefore, Blockchain emerges as the ideal carrier of the history of transactional information.
Perfectly complementing the blockchain system, the sound-wave technology facilitates the transfer of data and actionable information to and from the user’s mobile phone via sound. Integrated sound-wave-based technology, being hardware-independent, can work without the need for smart devices or functional internet connectivity to carry out digital payments. Additionally, the security features included in the integrated blockchain and sound-wave technology for multi-layer protection like tokenization, three-layer encryption, host card emulation, white box cryptography, and TOTP ensure high security to digital financial transactions. Eventually, users at Point of Sale (PoS) would be able to transact securely using the combination of blockchain and sound-wave technology.
Not only is integrated blockchain and sound-wave technology a safe gateway to seamless transactions, but the combination of the two technologies is the most convenient payment system for the user. Since the intervention relies only on the microphone and a speaker, the hassle of interruptions in the secure payment process due to connectivity problems is eliminated, enabling the user the benefit of smooth and contactless payment within the hearing distance of the merchant's emitter or receiver.
Payment frauds and security threats are major nuisances towards the making of a digitalised payment ecosystem. But with the advent of high-end technological advancements such as the integrated blockchain and sound-wave technology, the future of a digitised economy seems securely encrypted.
The author is Co-Founder, ToneTag
DISCLAIMER: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.