News / Blockchain may facilitate the 'new normal' of contactless parcel delivery

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The spread of Covid-19 has changed the handover of online purchases to consumers.

With serious concerns about possible infection, contactless delivery, with no signature for goods received, has become the norm. FedEx and UPS stopped signature requirements for deliveries in March, without any reported backlash.

While this probably avoided infections, it raised another problem for merchants: chargebacks have increased rapidly.

According to Nuggets, a payment and ID platform provider, they have increased 60%-80%, posing a serious headache for online merchants.

Nuggets founder and CEO Alastair Johnson sees biometric verification as the best solution.

The concept embraced by his outfit has digital biometric data loaded by the consumer and stored using blockchain technology. When the final-mile provider approaches the given address, he pings the consumer from a mobile device to verify identity and accept the goods.

Mr Johnson says this works better than solutions like taking photos, which may run into privacy issues. The technology could also be used to access parcel lockers, he said.

The technology can also reduce failed deliveries, he claims, as the contact is made with the consumer regardless of his/her location at the time of delivery. If the consumer is at another location, delivery can be redirected there.

“The cost of failed parcel deliveries in the UK is reported to have surpassed £1.6bn,” he added.

Use of the technology is free to consumers, who can sign up within two minutes if they have a digital piece of biometric identification, according to Mr Johnson.

“The economic drivers are all on the business side, namely chargebacks and failed deliveries. For the consumer, it is about privacy and data control,” he said. With their digital ID safely stored, there is no need for passwords or security questions about the name of their mother’s first pet, he noted.

The consumer’s data are stored in “zero-knowledge storage”, by first hashing on the blockchain and then storing them in IPFS decentralised storage, which nobody other than the consumer can access, including Nuggets.

And for couriers the system is seamless, Mr Johnson claimed. “We supply the line of code the courier needs to ping the consumer.”

Merchants can adopt the technology alongside other payment channels on their websites. While they have been the primary target group for Nuggets’ offering, couriers have also approached the provider, Mr Johnson said.

“There’s been a lot of interest, from companies of different sizes,” he added.

The roll-out of the service is driven by Nuggets’ clientele, many of which are based in the UK.

“It’s effectively available in Europe. We have relationships in Europe. One of our key partners is based in Australia,” Mr Johnson said. He expects the service to be up and running in Australia and New Zealand shortly. Firms based in the US and in Asia have also shown interest, he added.

Of the new technologies, blockchain has been one with muted proliferation so far, as many potential users have adopted a wait-and-see attitude while prioritising investment in other tech. Mr Johnson does not see an obstacle there.

“In the early days we had to explain blockchain. Now we talk about problems and solutions for customers. Recently we had talks with a bank and we realised afterwards that we didn’t really talk about blockchain. It’s about problems, not the technology,” he said.