Enhanced Security Approach Powered by Blockchain Technology with NFC to Prevent Fraudulence in Bank Letter of Credits

Abstract

Letters of Credit (Letter-of-Credit) frauds are deceptive attempts against financial institutions, primarily by providing availing false/falsify documentation as a proof of shipment of goods when, either, inferior goods were shipped, or no delivery was made at all. Letter-of-Credit also maybe forged to be provided to the supplier to supply goods. Whereas parties can forfeit the Letter-of-Credit by someone with vast experience and expertise in finance commerce laws, and international laws and business processes. In this research, we aspire to come up with an option of incorporating NFC-enabled mobile application into Letter-of-credit. The application is powered by blockchain technology and would be crucial in helping the recipient of the Letter-of-credit to achieve easy verification of the legitimacy of the document. The idea of using blockchain to prevent Letter-of-Credit fraud may not be novel where some have already been put into reality. However, not much work done in combining an NFC enabled mobile application leveraging on blockchain technology to prevent Letter-of-Credits frauds. The study is intended for banks who are still in migration to paperless business and still depending on a physical Letter-of-Credit for their business transactions.