Suppose you want to transfer funds to your client from a bank account opened in any country or state. The usual procedure is for the payee (beneficiary customer) to send a payment instruction to the payer (ordering customer) with the beneficiary's full name (or company name), account number, IBAN and other information necessary to have the transaction completed. The question is, how can the payer check the accuracy of the information contained in the payment instruction provided by the beneficiary customer? Who is to guarantee that the beneficiary customer didn't provide his private account number instead of the business one, or that he didn't change his name or company name with the intention of manipulating cash flows?

This information cannot be confirmed by the payer's bank, because the payer's bank doesn't have this information. It can only be confirmed by the beneficiary's bank, but they will not release any of their customer details upon your request. On the other hand, forcing the sender to verify the authenticity of the data by himself every time he initiates a transaction, sooner or later, will result in the imposition of serious errors in the money transfer process that can no longer be corrected. So, what should we do in case we face this situation?

The payer must be able to confirm the legitimacy and validity of the information received before executing the transaction. The payment instruction data must be preserved (as originally certified by the recipient's bank) and must not be subsequently changed, lost, corrupted or misused. We need a fintech solution that guarantees the establishment of a foolproof banking security system and mutual trust between senders and receivers of payments, as well as between clients and banks, thereby reducing the number of errors in the transfer of funds. This can be achieved by combining two innovative approaches that dive deep into blockchain technology. One is Digital Chip Card Technology and the other is Digital Telegram Service. There is a possibility of their wide exploitation in transaction banking and related services such as H2H (Host-to-Host), SWIFT, cash management and trade finance. See more...

Digital Chip Card Technology, or DCCT for short, represents a set of innovative solutions implemented in security protocols and e-business systems that gravitate towards preserving privacy, confidentiality, authenticity and integrity of data and protection against misuse. DCCT solutions are applicable in all operating systems and on all desktop and mobile devices.

The flywheel of digital chip card technology is a digital asset up to 1MB in size, with an integrated virtual chip. This is called a digital chip card. The "processor" of the virtual chip is powered by artificial intelligence (AI), while the "memory units" are occupied by files, metadata, security tags and information carriers.

The process of authentication of a personal digital chip card is autonomous and is based on the information embedded in the file itself, without referring to external links and sources. If the authentication of a digital card were to be performed using data stored outside the file itself, there would be a serious risk of data manipulation. Thanks to the security mechanisms of digital chip card technology, which intertwine and complement each other, this risk is reduced to zero.

Blockchain is a decentralized database that is shared and synchronized amongst nodes of a computer network and operates without the need for a central authority. Instead of being locked within a single database, as is the case with centralized systems, files and information are diversified across the blockchain and made available to as many computers connected to a common peer-to-peer network as needed. The transfer of data over the blockchain network is called a transaction. A file that contains data related to a transaction is called a transaction file.

Digital telegram service ("DTS") is a blockchain-based system for the exchange of electronic messages in the form of digital telegrams. The data storage technology used to manage digital telegrams is identical to that of DCCT, except that DTS is primarily used to share text messages, files, and information delivered directly to the recipient over the Internet. Digital chip card technology ("DCCT") and digital telegram service ("DTS"), together with blockchain technology, aim to provide reliable and secure channels for the transfer of financial information and to prevent its alteration, loss, corruption or abuse along the way. And that is exactly the solution we've been looking for and which we will now explain in more detail.

The virtual chip introduces security tags, which consist of a hash code, an IP address, a public key, and a timestamp. They are responsible for verifying the authenticity and integrity of the data embedded in the card. In addition to security tags, the digital chip card contains the following information:

• whether the account holder is a natural or legal person;
• account holder's full name;
• account holder's address;
• account holder's account number/IBAN;
• name of the account holder's bank;
• address of the account holder's bank.

The digital chip card is permanently stored on a server in the account holder's bank, on a remote database server that mediates the transaction, and on the account holder's device to which the card was downloaded. The creation of a digital chip card is accompanied by the generation of a unique XML file in [HASH].xml format, where the "hash" matches the hash code contained in the digital chip card as part of the security token data set. This XML file is an important component of the blockchain and an indispensable factor in the process of approving banking transactions.

With the help of DCCT and DTS technologies, the procedure for sending money is as follows:

• The payer will ask the beneficiary to send him the digital chip card that the beneficiary had received from the bank upon opening his account; the beneficiary can ship the digital chip card to the payer via a contactless transfer between two desktop or mobile devices, via e-mail, or via one of the messaging apps (Viber, Whatsapp, etc.);
• Meanwhile, the payer will prepare his own digital chip card for use;
• Upon receipt of the beneficiary-provided digital chip card, the payer will open the card scanning app in a web browser on his computer, smartphone or tablet;
The reader is powered by a cloud-based application located on a remote database server that manages processes out of anyone's reach and without the possibility of manipulation; first it reads the digital chip card with the payer's data and if the file is technically correct, the content is displayed on the screen, and the payer moves on to the next step;
• The reader then reads the digital chip card with the beneficiary's data; if the file is technically correct, the content is displayed on the screen; the payer carefully checks the content and compares it with what he expects to receive from the beneficiary; if the payer suspects that something is wrong, he will withdraw from the transaction; if everything looks fine, he will move on to the next step;
• The payer enters the amount of money he wants to send, the purpose (description) of the payment, the currency code and the SWIFT code (refers to overseas payments) and some other information related to whether the payment is covered in foreign or domestic currency, who is responsible for fees/charges of the banks engaged in the payment transfer (refers to overseas payments), etc.;

• hash code of the payer (extracted directly from the payer's digital chip card);
• whether the payer is a natural or legal person;
• full name (or company name) of the payer;
• address of the payer;
• account number of the payer;
• name of the payer's bank;
• address of the payer's bank;
• amount of payment;
• purpose of payment;
• SWIFT code (optional, for cross-border payments only);
• currency code (optional, for cross-border payments only);
• payment coverage (optional, for cross-border payments only);
• information about who pays the taxes/fees (optional, for cross-border payments only);
• some other information related to the transaction, if needed...
• hash code of the payee (extracted directly from the payee's digital chip card);
• whether the payee is a natural or legal person;
• full name (or company name) of the payee;
• address of the payee;
• account number of the payee;
• name of the payee's bank;
• address of the payee's bank.

The payer can now initiate a transaction by sending a funds transfer request to the payer's bank. After the transaction has been initiated, the remote database server mediating the transaction will read the aforementioned single-use digital chip card and generate a transactional digital telegram. This file may also include some other information provided by the payer's bank, such as the status of the payer's account, confirmation report of outstanding balance, etc. The transactional digital telegram is permanently stored in the databases of the payer's bank and the payee's bank. On the other hand, the digital telegram is only temporarily available on the remote database server and will be automatically deleted when the user downloads it, leaving no possibility for the file to be misused after the transaction is complete.

As mentioned in the previous chapter, the generated transactional digital telegram is first sent to the payer's bank to verify the payer's data, and then forwarded to the payee's bank to verify the payee's data. Finally, the transaction is either approved or declined. Here are some more details on how it actually works:

• The payer's bank checks the security tags from the transactional digital telegram, extracts the hash code related to the payer, finds the appropriate [HASH].xml in the bank's database and compares the content of the XML file with the content embedded in the transactional digital telegram;
• If everything looks fine, the payer's bank forwards the transactional digital telegram to the payee's bank for further verification;
• The payee's bank checks the security tags from the transactional digital telegram, extracts the hash code related to the payee, finds the appropriate [HASH].xml in the bank's database and compares the content of the XML file with the content embedded in the transactional digital telegram;
• If everything looks fine, the payee's bank approves the transaction; if an error is found, the transaction is rejected; in both cases, the payee's bank informs the payer's bank of the outcome, and the payer's bank informs the payer himself.

In order to minimize the possibility of alteration, loss, corruption or misuse of data related to the transfer of funds and to maximize trust and comprehensibility, we need to diversify the data across the blockchain and make it publicly available to all participants in the transaction. That is why electronic messages in the form of digital telegrams, which initiate, verify and approve (or reject) a transaction, have put blockchain technology into effect. Having the payer and the payer's bank at one end and the remote database server, the payee and the payee's bank at the other end of the transaction path, we will introduce DCCT Network as a core blockchain-based system with three nodes connected to a shared peer-to-peer (P2P) computer network:

• The first node in the queue is the payer's bank that initiates the transaction;
• The second node in the queue is the remote database server that mediates the transaction by calling on its cloud-based apps and services;
• The third node in the queue is the payee's bank.

The transaction file can be validated on any desktop and mobile device using a free web app and is available for download on both the payer's device and the payee's device at all times.

DCCT Network can be easily transformed into a chain of interconnected transactions thanks to the blockchain file structure and custom algorithms designed to enable this feature in the first place. The multi-node network is called DCCT Network Expand. Unlike the basic unit of a blockchain-based system with up to three nodes sharing common resources, DCCT Network Expand is composed of more than three (typically, many more) nodes connected to a common peer-to-peer (P2P) computer network. In an environment with implemented digital chip card technology and digital telegram service, DCCT Network Expand data blocks contain information about the transfer of funds and are interconnected by some basis. For example, when money is transferred between two same end users, or between two same banks, or with the same purpose of payment, etc. Instead of verifying a single block of data, as is the case with DCCT Network, here with DCCT Network Expand we have to verify multiple blocks of data, where each block in the chain depends on other blocks in the chain to be verified. The memory capacity of one block in the chain is up to 1MB.

A smart contract is a computer program running on a blockchain that is automatically executed upon meeting pre-defined terms and conditions. It relies on a binding agreement between two parties presented in traditional paper or digital form. A smart contract is made up of "if true then [do something] else [do something else]" conditional statements embedded within the transaction file, with outcomes dependent on whether or not predetermined conditions are met and verified. The execution of the smart contract initiates the completion of a transaction and the update of a transaction file represented by a digitally signed block of data, which is then stored on each of the nodes that make up the blockchain network. The transaction file can no longer be reversed, modified, corrupted or misused and is available for download and validation at all times.