iGolder Will Soon Offer Some DGC Online Commerce Tools
Online commerce is accomplished with absolutely no chargeback fraud. The fact is that you cannot reverse a transaction.
Last week, all major network news stations ran the story about Heartland Payment Systems and how some hackers had continuous access to their customer transaction database(s) since late last year. Somebody left the "digital backdoor" open and the criminals gained easy access to customer names, addresses, financial accounts and likely other private info like SSNs, DOBs or information of a personal nature.
The payment processing computers which the intruders copied, were used to process 100 million card transactions per month for 175,000 merchants.(that's a lot of credit card transactions) The company spokesperson said the hackers had access for several months and they just don't know how many hundreds of millions of card accounts were exposed.
From our industry's point of view, if you are a retailer selling online and accepting digital gold currency, you can simply laugh off this type of CC fraud. Chargebacks are just not possible with a digital gold system. All transactions are final.
As the e-gold slogan goes, "Get paid and stay paid."
Of course this is excellent if you are the seller (no chargebacks keep your income), but it's not always great if you are on the other end as the buyer. If you have ever bought merchandise online using digital gold and gotten 'ripped' or been dissatisfied with your purchase....well there was not much you could do but flame the company on some forum and hope others read it.
This issue has been haunting digital gold users for about a decade.
No digital gold company has yet built in a customer satisfaction/rating system or active dispute resolution required on all account holders.
Webmoney does a great job with offering a customer blackmark and arbitration service, but it is not required to be used by all account holders, so the possibility of a bad sale is still present. Webmoney even has a warning code built into each first time transaction so the account holder recognizes when they are spending to someone new. (it's excellent) I would imagine this also cuts down on incorrect transfers.
The newest DGC coming out of beta testing right now is iGolder.com and this system could develop into a powerful new commerce tool for DGC buyers and sellers.
In a pro-active attempt to prevent fraudulent online sales, the iGolder account offers all users two new features which are available on on all transactions. As a new iGolder user or visitor to their web site you will notice a feature named
Safetransit™. Safetransit™ is the name coined by iGolder which designates a delayed transfer of gold where closing the transaction is based on the successful receipt of goods. It's similar to escrow because the receiver has to perform before the funds will be delivered.
A Safetransit™ sale provides a time delay for the proper completion of any delivery and inspection of goods. The seller may set the time delay for his transaction. Unlike escrow, this delay will not last forever, once the time is up, the funds will transfers regardless if the sale is a happy one. (don't let the clock run out) During the delay period, the buyer may stop the transfer for any reason, thus protecting himself from non-shipment or misrepresentation of merchandise.
Because all DGC transactions are not reversible my opinion is that wide scale retail use of a DGC has not yet caught on with the mainstream public. However, this tool which protects buyers, could be part of a retail solution.
If the transfer is blocked, the buyer needs the consent of the seller to recover any gold or the buyer may file a dispute and "win" the arbitration. Any disputes regarding goods or services are professionally resolved before the payment is released. The Safetransit feature protects both buyer and seller and this feature seems to be a very workable solution for digital gold commerce.
Adding even one more layer of fraud protection to this feature, is the "First Transaction Protection Delay". I just completed a spend in the DGCmagazine iGolder test account. I sent a gram of test gold to the owner of the company. After completing the transaction a small notice appeared my the transaction details screen. It reads as follows:
Miminum Safetransit time
There is a minimum Safetransit time between you and Daniel's Primary Account is 1.0 days because the first transactions between 2 individuals have an initial delay of 1 day
The First Transaction Protection Delay also shields your account from unauthorized transactions. For instance, if a hacker managed to steal your iGolder password and attempts to empty your iGolder account, the hacker will have to wait a minimum of 24 hours for the transfer to clear, giving you time to inform us about the unauthorized transaction and recover your gold. The wait period depends on the transaction amount as displayed in the table below:
- Less than 100 grams --24 hours
- Between 100 grams and 1,000 grams --48 hours
- More than 1,000 grams --72 hours
The First Transaction Protection Delay only applies to the first transaction between two different iGolder members. After 30 days, all future transactions with the same two iGolder members are instant, regardless of the amount.
The First Transaction Protection Delay is exclusively for protecting you against unauthorized transactions; it is not a grace period for you or the other member to cancel a transfer. iGolder offers tools such as Safetransit™ and Cancellation Provision allowing both parties to gracefully delay or cancel a transaction.
Notice that the protection delay has drawbacks: you have to wait the same delay when you receive gold from each new member. Depending on reputation, we may waive this delay so that you can receive gold instantly regardless of the transaction amount. Waiving the transaction delay still protects you against unauthorized transfer, because when you send gold, the receiver has to wait the protection delay, giving you time to report any unauthorized transaction.
Safetransit left me wondering exactly what was involved with a dispute resolution and how hard is it going to be if I need to file a complaint? http://www.igolder.com/dispute-resolutions/ We will take a look at this process in a future article.