Western Union

1
Western Union

• Mgis 301 presentation

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Technological Imperative

• Technology is a dynamic force.
• The continued evolution of technology has created
  an information revolution.
• The information technology is creating change at
  many levels in the banking infrastructure.

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Practical Exploitation of Technology in Banking
in The Light of Three General Themes

• The changing relationship between IT providers
  and the banking community.
• The impact of technology on the organization of
  banking institutions and its impact on market
  structures.
• The revolution taking place in bank-customer
  relationship being prompted by the new use of
  technologies.

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What is An Electronic Transaction?

• Any transaction is an exchange. In a common sense
  definition, a transaction is a basic unit of
  measurement. We may make an exchange of goods or
  services for money or on barter.
• In a technological sense, a transaction is a
  series of steps.

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How does an ATM work?

• Insert the card
• Enter your pin
• Select the withdraw cash option

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Secure Banking Networks

• These steps in the ATMs process take place over
  secure banking networks.
• The banks have had secure network in place for
  years.
• The internet must be brought up to the standards
  of security with which people feel comfortable
  sending their money around.

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General Information

• Established in New York in 1851 as a telegraph
  company.
• 1995 First Data Corporation
• 7 billion merger with FFMC.
• Website coming online in year 2000.
• Founded 150 years ago and 200,000 physical
  locations around the world.

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• Fastest growing
• Leading money transfer service
• Online money transfer with your visa or master
  card.
• Sent to any Western Union location.
• It can be done without an ATM card.

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• Global leader in money transfer
• Easy transfer of money to 200,000 WU Agent
  locations in more than 200 countries.
• 3 billion revenue
• Largest network of its kind.

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Western Union Help Services

• Migration services
• Health
• For adults NCLR, ABE, ESL
• Education

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Deep History since 1851

• 1851 Group of businessman in Rochester, NY, WUs
  predecessor co.
• 1856 change name to Western Union Telegraph Co.

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• 1861 First transcontinental telegraph line
  providing fast communication during US Civil War
• 1871 Western Union Money Transfer
• 1914 First consumer charge card
• 1923 Signing telegrams
• 1943 First inter-city microwave system
• 1958 Telex, tele-printer service

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• 1964 Transcontinental radio beam system
• 1970 Westar I, first domestic communications
  satellite for US.
• 1982 Became the first company with five
  satellites...
• 1989Quick Collect, money transfer available
  outside North America.
• 1993Money in Minutes, Western Union Phone Card.
• 1995 WU completed a 7 bil.merger with First Data
  Corporation.

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• 2000 www. westernunion.com, money transfer on
  Internet
• 2001 Celebrates 150th anniversary with more than
  200,000 Agent locations...

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About Western Union

• international firm which is the chief leader of
  the sector.
• You can transfer your money in a few seconds to
  its agencies all over the world.

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The money transfer system of the world

• Safe
• Receivers pays no fee
• Easy

• Fast
• Convenient
• Reliable

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• You dont even need to have a bank account to use
  its system
• You can use banks that I will mention later, to
  transfer your money securely.

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Whats the quick money transfer?

• Over 200 countries, there are 200,000 agencies
  within banks and post offices which are W.U.
  Compare.
• All over the world, there can be a system that
  allows you to send money with commission and give
  money from the other parts of the world. Its only
  takes minutes, rather than a day or hours.

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Functioning Money Currencies

• Cash transfers Western Union Money Gram
• Money Gram, is the competitor of the Western
  Union and both work same way. Money gram has over
  26000 branch office approximately 120 countries

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• Advantage of Money Transfers
• As I mentioned above, latest half an hour you can
  get your money, worldwide, there can not need
  stable account and the receiver gets his/her
  money with their national ID card.
• 3. To receive the money sends by W.U.
• Paying form fulfilled with the form you need your
  ID and then you can get your money from the
  agency.
• Sends money from W.U.
• Fulfilled the paying form and then show your ID.
  In this section, MTCN (money transfer code
  number) you have to say the receiver your code
  number.

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Commission Ratios
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(No Transcript)
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Agencies in Turkey

• Denizbank A.S. [phone],
• Finansbank [phone],
• Fortis Bank A.S.- 4440144,
• General Directorate of Post (Turkish Post) (312)
  324 1615,
• MNG Bank 0800 211 63 63,
• Oyak Bank A.S. [phone],
• T.C. Ziraat Bank [phone].

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Computer Architecture-Centralized vs.
Decentralized System
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Development of Computers-Batch Processing
Traditional method of processing data-Tasks are
carried out one by one sequential order
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Development of Computers-OLTP (Online
Transaction Processing)-Real time processing-
Money transfer is an OLTP application
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How the system works?)
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What is client server?)
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Database Management
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Networking -Closed Architecture Computer to
Computer Links-ATM (Asynchronous Transfer Mode)
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Database Technology

• -Relational Database
• -Object Oriented

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Operational and Financial Structure of Money
Transfer

• When we look at the system design of western
  union we see high similarities with the typical
  electronic fund transfer used in banking sector.
• One of the features of the system that
  distinguishes it from EFT is host to host
  transmission. In the places where coverage does
  not exist , since Western Union has agreements
  with private banks the system can use their
  networks and conclude the transaction.

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Database Management
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• Another feaure that seperates Western Union from
  EFT system is if the transaction is money
  transfer then by using this network W.U can
  provide instant transmission without any waiting
  time.
• We can refer to two systems Batch Processing and
  Real Time Processing while explaining insant
  transmission.

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Batch Processing

• A batch system involves the transmission or
  processing of a group of funds transfer
  instructions at single point in time.

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Real Time Processing

• In a real time system, the transmission and
  processing of payment instructions takes place
  payment by payment at the time each payment is
  initiated. Information pertaining to incoming and
  outgoing instructions is thus available
  continuously. Western Union uses real time
  processing system.

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• There are two different banking financial
  intuition designs.
• 1.Net Settlement Design
• 2.Gross Settlement Design

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Net Settlement Design

• In this system, banks send information related to
  individual payments to a single location, the
  so-called clearing house. The banks participating
  in the clearing house agree not to settle for
  each individual payment immediately trough
  interbank funds transfers, but their claims and
  obligations accumulate over a certain period and
  to offset incoming and outgoing payments. Banks
  then transfer only the value of their net
  obligation to the clearing house at a designated
  settlement time at the end of the clearing cycle.

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Gross Settlement Design

• With Gross Settlement payment, messages are
  exchanged between each pair of banks , resulting
  a large number of communication channels. Banks
  settle each and every payment individually trough
  fund transfers.

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• Each money transfer is protected by Western Union
  safety system, recognized worldwide and can be
  located with a control number, thus ensuring the
  payment of the money you sent, quickly, only to
  the receiver.

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Encryption

• A process of distinguishing a message in such a
  way as to hide its substance.
• A process of creating secret writing.
• Essential to creating a secure environment for
  digital money.
• A way to make sure that no one else can effect
  the message, that no one can interpret and read
  the message, modify it or substitute another
  message.

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• Plaintext ? Ciphertext ? Plaintext
• encrypt decrypt
• Figure Encryption and decryption
• ATMs also use encryption for security
• The unencrypted message is called the
  plaintext. Once encrypted, the message is called
  ciphertext. The ciphertext of the PIN number and
  your request for cash is sent to your bank. In
  fact, encryption is half the process Turning
  ciphertext back into plaintext is called
  decryption. The bank decrypts the message
  containing your PIN number.

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Encryption and decryption allows keeping
message secure, of creating secret writing, which
is called cryptography. The branch of mathematics
that embodies cryptography are practiced by
cryptologists, who are nearly all mathematicians
because ciphers are all based on extremely
difficult mathematical problems and number
theories. To gain the trust and loyalty of
its customers, a business must be able to
guarantee that sensitive personal and financial
information about them is not accessible to
outside parties.
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The encryption system upholds these principles

• identification
• authentication
• nonrepudiation
• verification
• privacy

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Identification Authentication

• Identification is the process verifying that
  the sender of a message truly is who they are
  stated to be. Need for identification is
  fulfilled by a PIN number or a password.

• Authentication is the process of verifying
  the true sender of a ciphertext and verifying
  that the text of message itself has not been
  altered. Authentication requires digital
  signatures, if a single byte of the digitally
  signed message has been altered, the decryption
  process will reveal that alteration.

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Verification Nonrepudiation

• Verification is the ability to positively
  identify and authenticate a particular encrypted
  communication. Both must be true before a message
  can be trusted completely.

• Nonrepudiation is the quality of the secure
  system that prevents anyone from denying that
  they sent certain files or data, when in fact
  they did.

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Privacy

• Privacy is the protection of sensitive and
  personal information from unintentional and
  intentional attacks and disclosure.Strong
  cryptosystems provide more privacy than weak
  cryptosystems.

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Western Union uses 2 encryption methods

• DES (Private key cryptography)
• RSA (Public key cryptography)

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DES

• Data Encryption Standard which is a secret-key
  system is based on secrecy of its encryption
  algorithm but not on the secrecy of the key used
  to encrypt a given message. Encryption with DES
  is known as secret-key or symmetric-key
  cryptography, since the same secret key must be
  used to encrypt and decrypt a message by the
  sender and the receiver.

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RSA

• Plaintext ? Ciphertext ? Plaintext
• 
  encrypt decrypt
• 
  key key
• Figure DES encryption and decryption use the
  same (secret) key.
• It is based on the notion that cryptographic
  keys can come in pairs and that one key cannot be
  derived from the other. One key of pair is used
  to encrypt a message, the other to decrypt, only
  that specific key of the pair decrypts a message
  encrypted by its complementary key.

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RSA allows two functions that DES does not
provide

• secure key exchange without prior exchange of
  secrets
• digital signatures
• These two encryption methods complement each
  other perfectly
• RSA has the advantage of potential for increased
  security since the private half of the key pair
  need not be transmitted or revealed to anyone.
• DES has the advantage of being much faster that
  RSA and well suited for encrypting large sets of
  data.

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Key for DES message, encrypted with RSA?
Message encrypted with DES

• Used together, RSA and DES provide a secure
  digital envelope for sending encrypted message.
• RSA and DES are combined as follows
• First the bulk of message is encrypted with a
  random DES key.
• Then the DES key is encrypted with RSA.
• The DES encrypted message and the RSA encrypted
  DES key are sent together as secure digital
  envelope.
• Figure Digital envelope