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Education

Blockchain might not Some have hailed the emergence of
blockchain as a way to secure ecom-
solve chargeback and merce transactions in a time when
massive breaches have exposed
countless individuals to cyber crimi-
ecommerce fraud nals. However, before we put all our
eggs in the blockchain basket, we
need to examine whether the tech-
nology is ready to protect merchants
from chargebacks and fraud.
Data breaches have caused great
stress for ecommerce and card-not-
present merchants because when
credit card data gets out into the open,
the resulting unauthorized use drives
By Suresh Dakshina cardholders to file chargebacks, add-
Chargeback Gurus ing cost and time on top of the dam-
age done by the initial breach.
s blockchain technology the way to fight chargebacks and chargeback
fraud for ecommerce retailers? This question is becoming more impor- Blockchain, which is a decentralized,
tant as we look for ways to secure ecommerce transactions, which distributed and public digital ledger
I continue to grow exponentially each year. With more transactions, the used to record transactions across
likelihood of additional chargebacks, including fraudulent claims, increases. many computers so that any involved
But is blockchain the answer? record cannot be altered retroactive-
ly, can be an asset in preventing iden-
tity theft and cardholder information
from being stolen, because it can be
difficult to extract that data from a
blockchain system.

True versus friendly fraud
Blockchain may play a role in pre-
venting true fraud because most
true fraud comes from stolen credit
cards or identity theft. Again, since
blockchain can provide security for
cardholder data, it is possible charge-
backs resulting from true fraud and
identity theft can be slowed. Also, a
blockchain payment system creates
a wall that prevents customer data
from being stolen, thus reducing op-
portunities for true fraud, which is a
welcome advancement for merchants.

Going forward, we will see numer-
ous exciting developments in block-
chain technology, but as of now, we
have barely scratched the surface of
this technology. We still don't know
how effectively blockchain will be in
fighting true fraud. Fraudsters tend
to stay ahead of the curve and, as we
all know, when a new system comes
along, it tends to come under attack
by criminals searching for vulner-
abilities.

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