Invoice financing has been a steadily growing component of the financing market as a whole for the last few years, and, in 2016, it became the third-largest financing market. Nonetheless, the risk of frauds is still very high, and most solutions proposed so far are based on private, proprietary platforms that cannot match the global nature of such a market. Even the most recent proposals based on blockchain are mainly adopting a private, permissioned blockchain due to the lack of confidentiality in public blockchain. In this article, we propose an Invoice financing platform based on a public blockchain supporting both fully open and group-restricted auctioning of invoices. We addressed the confidentiality issue by storing the confidential data encrypted in IPFS and the correspond- ing hash in the smart contract hosted on Ethereum blockchain. Our blockchain-based solution ensures data confidentiality and benefits from the main properties of the public blockchain required in Invoice financing systems, such as transparency, immutability, trustworthiness, and security. Furthermore, our platform introduces a reputation system based on the past behavior of entities, computed using the blockchain global ledger. Such a reputation system allows insurance companies to modulate the cost of the insurance contracts they offer. This combination guarantees the complete transparency and tamper-proofness of a public blockchain, while it allows reducing insurance costs and fraud possibilities.

A Fraud-Resilient Blockchain-Based Solution for Invoice Financing

Meriem Guerar;Alessio Merlo;Mauro Migliardi;Luca Verderame
2020-01-01

Abstract

Invoice financing has been a steadily growing component of the financing market as a whole for the last few years, and, in 2016, it became the third-largest financing market. Nonetheless, the risk of frauds is still very high, and most solutions proposed so far are based on private, proprietary platforms that cannot match the global nature of such a market. Even the most recent proposals based on blockchain are mainly adopting a private, permissioned blockchain due to the lack of confidentiality in public blockchain. In this article, we propose an Invoice financing platform based on a public blockchain supporting both fully open and group-restricted auctioning of invoices. We addressed the confidentiality issue by storing the confidential data encrypted in IPFS and the correspond- ing hash in the smart contract hosted on Ethereum blockchain. Our blockchain-based solution ensures data confidentiality and benefits from the main properties of the public blockchain required in Invoice financing systems, such as transparency, immutability, trustworthiness, and security. Furthermore, our platform introduces a reputation system based on the past behavior of entities, computed using the blockchain global ledger. Such a reputation system allows insurance companies to modulate the cost of the insurance contracts they offer. This combination guarantees the complete transparency and tamper-proofness of a public blockchain, while it allows reducing insurance costs and fraud possibilities.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11567/1000054
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