Transparent Financial Systems will be rolling out a new service called Xand Alpha, which will come along with a confidential transactions feature, according to a March 25 company blog post.
Transparent has developed a confidential transaction system which draws from proven cryptography in the field. According to the post, that will allow users to protect their identity and transaction details while also preserving the “public auditability” of the ledger.
The company said that with advances in blockchain technology, anyone can keep a complete copy of every transaction to verify its validity, providing more transparency in a financial product. However, there is a potential downside to companies using a blockchain, since they are publishing their accounting records.
The blog noted that businesses are accustomed to having financial transactions remain private. As such, exposing those transactions can up revealing info about a business’s suppliers, business partners, sales and trading volumes and patterns – which could be a disadvantage.
Transparency said there are modern tools that can help counter these shortcomings, such as zero-knowledge proofs to allow for proving knowledge without revealing it, or homomorphic encryption schemes to allow performing math on numbers one doesn’t know.
Those kinds of things can add more transparency, and Transparent has adopted some such techniques for the Xand network. The company said Xand’s design “helps to facilitate compliance” and always lets users know the counterparties to any transaction they’re involved in.
PYMNTS reported that the digital shift spurred by the pandemic has caused many consumers to look into new payment alternatives while shopping online, such as buy now, pay later (BNPL) options and mobile wallets.
However, digital identity verification has also become an issue as this has increased, as has BNPL fraud.
Identity verification becomes a challenge because of consumers’ need for convenience and desire that transactions be seamless and easy — usually in the form of alternative payment methods, where all the details are available and the user just has to click ‘buy.’