Blockchain ID Solution Aims to Tackle Spike in Delivery Fraud Amid Coronavirus Measures

Nuggets, a digital identity and payments platform, has developed a way to accept deliveries without needing a physical signature to combat a spike in fraud and chargebacks during the COVID-19 pandemic.

Using biometrically verified contactless delivery technology secured with blockchain technology, the London-based firm wants to equip consumers with the means to provide verified proof of identification while still maintaining the social distancing required under coronavirus measures.

Nuggests says the contact-free signing system would help counter a rise in delivery fraud and chargebacks amid the pandemic. Since customers no longer have to sign for deliveries in order to maintain distancing, fraudulent chargebacks are skyrocketing. Citing figures from the U.K., Nuggets also said failed deliveries have also cost courier firms as much as £1.6 billion (US$2 billion).

“Merchants are so overstretched with increased orders, staffing issues and supply chain fulfilment problems that having to dispute chargebacks ends up at the bottom of the list," said Nuggets CEO and co-founder Alastair Johnson.

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During a delivery, the courier would use an app to scan the receiver's digital ID (issued by Nugget) to verify they are indeed the customer who ordered the item(s).

When the customer is successfully identified, the parcel is delivered and a proof of delivery is immediately sent to the company at which the purchase was made. Nuggets said the system "guarantees verified delivery of a package to the right recipient," while using a blockchain allows for the secure communication of customers' biometric and payment information.

E-commerce has seen a huge boost in recent months, due largely to coronavirus stay-at-home orders. Global courier DHL "has seen volume growth of more than 36% in domestic volume and 28% cross border volume from the daily averages seen in February," industry publication Aircargo News reported on May 14.

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“The combination of the astronomical costs facing our eCommerce businesses, from fraudulent chargebacks to failed deliveries and fake user reviews, big savings can be delivered by having Nuggets integrated, said Johnson.

CoinDesk reached out to ask the firm when its technology might see real-world adoption but did not immediately hear back.