Secure Dispute Resolution Framework for Online Financial Transactions

The rise of real-time digital payments has increased exposure to authorized push payment (APP) fraud, where users are manipulated into initiating otherwise legitimate transfers to fraudulent accounts. When such incidents occur, banks often rely on opaque, manual, and inconsistent procedures to decide on reimbursements, which can erode trust and create prolonged disputes. This study proposes a Secure Dispute Resolution for Online Financial Transactions (SDR-FT), a privacy-preserving framework that integrates with existing online banking flows and provides cryptographic evidence of protocol compliance. SDR-FT uses a smart contract as a tamper-proof bulletin board, a statement agreement mechanism for binding key establishment, and auditor-based dispute assessment with encrypted verdict aggregation. Two aggregation variants are described: (i) an efficient XOR/PRF-based method for threshold e = 1 and (ii) a Bloom-filter-based method for general thresholds. Security is analyzed against malicious customers and banks while limiting information disclosure to the final verdict. A prototype implementation demonstrates practical overheads, with dispute resolver computation remaining sub-millisecond and auditor encoding under approximately 11 ms for n = 12 under higher thresholds.