Block Notary app uses blockchain timestamping to combat credit card fraud

The last few months have seen a welcome spurt of advancements in the market for blockchain timestamping. Almost forgotten now are the first-generation timestamping applications that simply take a PDF document and attach it to a tiny spend on the bitcoin blockchain, therefore, notarizing it forever. While there will always be an industry for notarizing documents, some smart entrepreneurs have figured out how to take this technology to the next level and find new applications for it, basically notarizing all kinds of things outside of the office, that couldn’t have easily been notarized before.

Uproov is an interesting new service that specializes in timestamping photos and video for all occasions. Get into a fender bender? Open your Uproov app and record the damage, all timestamped and provable in court. It’s very handy and would work great for many applications like officializing a marriage, signing a lease, or documenting the condition of a rental car or home at the time of check-in.

For the first time in history, it’s now possible to walk around all day collecting reliable, courtroom-ready evidence about every meal you eat, every word you say, every person you meet, and every event that happens around you.

On the same note, Block Notary launched their app in iTunes last month, which allows a similar timestamping from any iPhone, but has so far been focused on photos.

However, It’s Block Notary’s other application that is charting new territory. Available now to financial institutions and other enterprise-level vendors for use with their customers, this new usage for blockchain timestamping technology makes it clear that there are many creative, new uses for this tech that we haven’t discovered yet.

Targeting credit card identity theft, Block Notary announced yesterday that they are offering a service that allows remote customer ID verifications. This service will allow any bank or vendor to safely accept new customers without them coming into an office, by video recording them speaking a script and showing their state-issued ID, then timestamping that video on the blockchain.

remote IDBlock Notary's remote ID verification process

In their first deployment of the new application, Block Notary is helping their client onboard new customers without letting so many credit card scammers slip through the application process. The client, in this case, is the Russian payment provider Pay-Me, whose Point of Sale (PoS) terminals are a favorite target for credit card scammers to launder money with.

The Pay-me website claims to serve over 13,200 customers, and their card reader, which is itself a low-cost alternative to traditional card readers, takes Visa and MasterCard over the country’s most popular banking networks.

Before the Block Notary remote verification process, the choice for Pay-Me was either to allow the scammers to sign up just as easily as the legitimate customers, or force all customers to drive to their office and do the customer sign-ups in person.

Vladimir Kanin“Recording a video of yourself during the registration process helps prevent fraud. As CEO, I’d like to make it as difficult as possible for criminals to use Pay-Me to conduct illegal activities.”

- Vladimir Kanin, Pay-Me CEO



Naturally, the in-person signups from customers around the huge Russian federation wouldn’t be very good for sales, so they’ve been putting up with the scammers taking advantage of their far more simple sign-up procedure until now.

A 2015 report by the European Central Bank (ECB) on credit and debit card fraud states that the total value of fraudulent transactions conducted using cards issued within SEPA and acquired worldwide amounted to €1.44 billion in 2013.

66 percent of the value of that fraud resulted from card-not-present (CNP) payments, which are payments made via the internet, post or telephone, simply sending typeable card details online and processed elsewhere. This is best known as ‘identity theft,’ and it is precisely the problem that Block Notary has set out to stop.

Getting these card details is the easy part, especially in Russia. The black markets and dark web are practically overflowing with this data for sale. Once the scammer has their victim’s details, they can either take it to an ATM machine or use a Point of Sale (PoS) terminal to turn that data into cash. It turns out that about more of this fraud is cashed out at PoS terminals than at ATMs, making the most popular method to cash out being to first sign up as a vendor and get a PoS terminal themselves.

fraud by category

With the new process from Block Notary, Pay-me’s customers can sign up for their PoS merchant accounts and show in full, time-stamped security, their faces, ID cards, voice, and every bit as much documentation from the comfort of their own homes as they could in person. No one is making a guess yet about the amount of identity theft this could stop, but it is likely to be significant, and hopefully spread to other merchant processors quickly.

Other uses for remote ID verification exist everywhere in the business world. Even within the bitcoin industry, lenders like BTCJam could use such a service to stop scammers trying to take out loans with no plan to pay them back.

An obvious mainstream use for Block Notary would be for signing up new banking customers remotely. Most banks will only let new users open an account of some kind while sitting there in person with them. Estonia’s e-Residents know this fact all too well: They were able to sign up to be a resident of Estonia remotely, but to get a bank account in Estonia they still have to travel there in person and have a “face-to-face” meeting at a local bank.

This made starting a business for the 500 plus e-Residents that run an Estonian business an expensive ordeal, so having a way to remotely verify ID like this could be a game-changer, allowing many new businesses to flourish in the tech-centric country.  

However, if there has to be a first use case to showcase the good that this technology offers, fighting Russian credit card scammers is probably as good as it gets. Russia is somewhat special in the world for having a high concentration of credit card identity thieves. With any luck, this example will be very visible and blockchain timestamping will catch on across most industries overnight because of it.