Green Team

1
Feasibility Presentation

• Green Team
• October 16, 2006
• Product Customizable Credit Card Protection (C3
  P)

2
Organization Chart
3
This family received food stamps
www.co.kern.ca.us/dhs/images/0987.jpg
4
This family received money from FEMA
www.katrinapictures.blogspot.com/
5
This family received both
http//www.spasearch.org/admin/images/fld_main_pho
to/fld_main_photo_38.jpg
6
What do these families have in common?

• All these families received Government money
• The first two used the money as intended
• The third is guilty of spending government money
  on things other than the intended purpose

7
FEMA Fraud

• Hurricane Katrina victims
• 900,000 of 2.5 Million aid applicants were
  fraudulent

http//www.msnbc.msn.com/id/11326973/
8
Problem Statement
Government organizations and private businesses
have inadequate protection against unauthorized
purchases by authorized cardholders, which
results in a loss of funds.
9
Problem Analysis

• Out of a 2.5 trillion government budget
• 14 billion was spent on private purchases by
  employees
• 2 billion was spent on unauthorized purchases by
  employees

Foiling credit card fraud by Jenny C. McCune
Bankrate.com http//www.gpoaccess.gov/usbudget
/
10
Problem Characteristics

• Tracking physical receipts
• Archaic
• Inaccurate
• Unreliable
• Easy to lose
• Employees produced 20 of all transaction
  receipts
• Cards can be stolen
• Organization loses money
• Money spent unwisely by an authorized user of the
  card is not covered under fraud protection

http//www.dallasnews.com
11
Solution Characteristics

• Prevention of lost corporate funds
• Reduces personal, unwarranted spending
• Biometrics
• Prevents unauthorized use
• Uses customizable database
• Allows different business to have different
  options

12
C3 Protection Card

• So what is C3P? Customizable Credit Card
  Protection

13
Objectives

• Develop a customizable credit card system to
  prevent unauthorized purchases by employees
• Customizable database to hold prohibited
  purchases
• GUI to allow customization of database
• Uses Merchant Commercial Codes (MCCs)
• Use Universal Product Codes (UPCs)

• Implement latest security technology for card
  protection

14
Features

• Secure Credit card
• 128-bit DES encryption
• Biometrics
• Fingerprint
• Photo ID
• Allows customizable control over cards use
• Controlled by a user interface to each business
  personal database

15
Customers

• Hard Customers
• Visa
• MasterCard
• Discover
• American Express
• Soft Customers
• Every business that holds a business credit card
• Caring and concerned parents who issue credit
  cards to their children

16
Customer Characteristics

• Credit Card Companies
• Spend millions each year on securing their credit
  cards
• Minors are Credit Card Companys new target
  consumer
• Credit Card Companys Consumers
• Small businesses report billions of dollars in
  losses through embezzlement each year
• Parents are concerned with giving children
  control of a credit card yet are even more
  concerned about giving a child real cash

http//news.com.com/Retailersfeelsecurityhea
t/2100-7349_3-5680788.html http//www.bankrate
.com/fox/news/cc/20000508.asp
http//www.fbi.gov/publications/financial/fcs_repo
rt052005/fcs_report052005.htm
17
Why does the customer need this?

• Soft customer
• Secure and efficient control of company funds
• Reduced costs to prevent and lesson the effects
  of fraud
• Parental control of children's spending
• Hard Customer
• Offer safer card services to credit users
• Larger customer base
• Increase of large, reliable customers

18
Major Functional Component Diagram
19
RFID Card Specifications

• An embedded antenna that is attached to the chip
  is used to transfer information stored in the
  chip's memory
• The range of operation is 2.5" to 3.9
• Information can be written to the card the same
  way it is read.
• The fingerprint scanner can be added

20
Software Features

• Intuitive web-based GUI Interface
• Able to customize MCCs and/or UPCs by creating an
  acceptance list
• Able to analyze and graph employee spending
  habits
• Incoming UPCs and MCCS are compared with an
  acceptable database of allowed codes

21
Receipt Tracking

• For each business, all employee purchases are
  tracked and listed by employee
• Receipts will list accepted and rejected
  purchases
• Receipts can be grouped by purchaser, date,
  and/or MCC

22
Smart Card Setup

• User account access information added to smart
  card memory by C3P
• 1st user finger scan saves a three-dimensional
  electrical image of the fingerprint's unique
  pattern using small variations in finger surface
  capacitance.

23
Authentication Process
Current Process
NEW Process
Vendor must take the credit card and ID from
customer
Hold your thumb over the fingerprint scanner to
prove your identity.
Then vendor must authenticate the customer by
judgment alone.
If your fingerprint matches, the Smart Card
RFID chip will be activated
Touch the card to the card reader and the
transaction will be processed.
If the customer matches the identification, the
transaction is made.
24
Payment Process
Current Process
NEW Process
You swipe your card at the point-of-sale
register.
Vendor swipes your card at the point-of-sale
register.
Your data is sent to our servers for
verification.
The data is sent to a computer to verify your
credit.
Your data is then sent to the credit servers to
verify.
If you have the funds, your purchase is
allowed.
If your card is accepted and your purchases are
valid, sale is complete.
25
Whats in the Box?
Whats Not In The Box
Loading Station
Whats In The Box
Whats In The Box
Businesses
IF REQUESTED
Computer with Internet connection
Credit Card Companies
26
Flow of Information/Hardware
a. Request CC w/C3P
b1. Camera? How many cards?
b2. Reply
e. Send camera (opt.) authentication code
Business accesses C3P database online
f. Send photos
h. Send cards with CC logo photo ID
27
What this product does not do

• Provide point-of-sale RFID readers
• Protect against blocking of authorized purchases
• Will mostly be a result of human error
• Will decrease in occurrence as more businesses
  use product
• Provide credit for businesses

28
Competition Matrix
Uses existing card readers
Tracks purchases and patterns
Uses existing card readers
Customizable purchase restrictions
Can set Spending Limits
Blacks-out MCC codes
Blacks out UPC codes
Biometric ID (photo and fingerprint)
Prevents Duplication
For Government Use
For Personal Use
For Business Use
Cards
29
Cost (Soft Customer)
http//www.processor.com/editorial/article.asp?
articlearticles/P2716/30p16.aspguid
30
Cost (Hard Customer)
http//configure.us.dell.com/dellstore/config.a
spx?cuscs04kc6W300lenocpe1950-maxsbsd
31
Pros

• Smart Card Technology
• Quick
• Uses Biometrics
• Safe and Secure
• Customizable
• Spending limits
• Tracks Items Bought
• Tracks Vendors Bought From
• More Efficient
• Saves Time Spent On Accounting
• Saves money
• Keeps better records
• Automatic record of exact item bought and vendor
  shopped at
• Better information for routine audits

32
Cons

• Uses fingerprints
• People are afraid of giving up such information
• Solved with encryption and marketing
• Vendors need RFID readers
• Requires New Technology
• Many vendors are getting scanners
• 7-11 is adding 5,600 RFID scanners this year
• Accidental blocking of necessary purchases
• Solved with training and research
• 24/7 Server/Website Maintenance

mastercard.com
33
Risk Probability/Impact Matrix
34
Risks
35
Risks
36
Return on Investment

• Improves reputation of credit card company
• Reduces loss of money due to unscrupulous
  purchases
• Saves time used to perform manual audits
• Reduces fraud
• Reduces the number of investigations required

37
Conclusion

• Regulates how funds are spent
• Uses biometrics
• Prevents the use or selling of stolen cards
• Vendors, credit customers, and card companies
  will benefit
• Vendors will get higher quantity and more
  efficient business
• Credit customers are protected and have less
  wait-time in line
• Card companies get to sell cards and RFID sensors
  to vendors while increasing their number of users
  
• C3P will revolutionize the credit system world
  wide

38
Questions
At this time, we welcome any questions you may
have.
39
References

• DISD credit card oversight lax
• http//www.dallasnews.com
• Picture 1
• www.co.kern.ca.us/dhs/images/0987.jpg
• Picture 2
• www.katrinapictures.blogspot.com/
• Picture 3
• http//www.spasearch.org/admin/images/fld_main_ph
  oto/fld_main_photo_38.jpg
• FEMA Fraud, http//www.msnbc.msn.com/id/11326
  973/

• IEEE Feasibility Study on biometric credit cards
  http//www.ee.ucla.edu/faculty/papers/ingridv_Tr
  ansCE_nov04.pdfsearch2 2Portable20Biometrics2
  2
• Smart Card technology with localized, portable
  biometrics
• http//www.biometricassociates.com/smartcard.php
• Open source smart card technology, both software
  and hardware
• http//www.smartcardalliance.org/industry_news/in
  dustry_news_item.cfm?ite mID1596

40
References

• Food stamp fraud http//www.frac.org/html/federal
  _food_programs/programs/fsp_faq.html4
• Food stamp info http//www.fns.usda.gov/fsp/faqs.
  htm9
• Data on food stamp fraud
• (http//www.eweek.com/article2/0,1895,1972079,00.a
  sp)
• (http//www.foodstampfraud.org/)
• (http//www.cioinsight.com/article2/0,1540,1850300
  ,00.asp)
• FEMA Fraud data
• http//www.cnn.com/2006/US/09/13/katrina.fraud/ind
  ex.html?sectioncnn_topstories)
• (http//www.msnbc.msn.com/id/11326973/)
• Lockout codes
• http//www.admin.mtu.edu/acct/dept/pur/purchcard/l
  ockout.htm
• Info on why this is a problem
• http//www.dallasnews.com/sharedcontent/dws/news/l
  ocalnews/stories/070206dnmetpcards.192c71f.html
• http//financialplan.about.com/od/studentsandmoney
  /a/TeenCreditCards.htm
• Info on current program in place
• http//arc.publicdebt.treas.gov/DWP/fs/fscredcard.
  htm1
• Data and why this is needed EPAs complaint
  paper on current system!!!
• http//www.epa.gov/oig/reports/1995/bankrep.htmCH
  APTER204
• How credit cards work http//money.howstuffworks.
  com/credit-card2.htm

41
Appendix A

• Expert Testimony from Admiral Julius Caesar from
  SAIC

42
Expert Testimony Current Problems

• Navy sailors are given credit cards for travel
  because they do not have enough personal cash
• Spending money in Girly Bars
• Tabs in excess of 15,000
• Private Business
• Employee used company credit card to put 14,000
  down payment on a house
• Employee bought several 1,500 airline tickets,
  and canceled the flight to collect the cash
  refund, which he used to finance his private
  company
• Employee bought 1,500 in thongs at Victoria
  Secret

43
Expert Testimony - Current Solutions

• Only activating the credit card for the duration
  of the travel
• Background credit checks on employees to be
  entrusted with company funds

44
Expert Testimony Loose ends left by current
solution

• Cant regulate purchases
• Company liable for purchases
• Employees cant pay the company back
• Must be taken to court

45
Expert testimony Time and Money spent on problem

• 25,000 per division per year
• 20 Divisions
• 250,000 per year for this company
• Credit card companies dropped the Navy as a
  customer because of fraud problems

46
Expert Testimony - Data

• 2002 1.4 million Government Travel Cards in use
• 3.4 billion spent on purchases with these cards
• One man made 262,800 in charges on 13 Government
  Credit Cards

47
Expert Testimony On C3P

• Target high risk employees
• In the 18-25 year-old bracket
• Dont know how to use credit
• Employees with bad credit

48
Authentication
49
Fingerprints

• Advantages
• Relatively Mature Technology
• Low Cost
• Highly Portable Technology

50
Biometric Fingerprints

• Finger Print Characteristics
• Genetic and environmental factors
• Never the same
• Biometric image cannot be reproduced

• Finger Print Scanner
• Capacitive Scanner
• Electric Current

51
Appendix B

• Merchant Commercial Code (MCC) A specialized
  code that categorizes a store based on what it
  sells (e.g. Target and Wal-Mart have the same
  MCC)
• Universal Product Code (UPC) A code that
  designates a specific product, different for
  every brand and variation of a product (Lays and
  Pringles potato chips still have different UPCs)