Green Team

1
Milestone Presentation

• Green Team
• November 15, 2006
• Product Customizable Credit Card Protection (C3P)

2
Organization Chart
3
Presentation Outline

• Problem/Solution Introduction
• Process Description
• Solution Characteristics
• Market Analysis
• Milestones, Deliverables, Budgets
• Risk Assessment
• Return On Investment
• Conclusion

4
Inspiration - Scenario

• You own a business, for example, a construction
  business
• Large employee base
• Employees need to make purchases
• Company credit account
• Manual receipt tracking to validate purchases

5
Problem Statement
Organizations and private businesses have
inadequate protection and controls over
unauthorized use by authorized cardholders, which
results in a loss of funds. Current methods of
addressing unauthorized use are expensive and
subjective.
6
Inspiration Limiting by Vendor

• Since your employees should only need to shop for
  building supplies and maybe other general supplies

7
Inspiration Limiting by Vendor

• They should not be using this card in stores
  other than those that sell these types of
  merchandise

8
Inspiration Limiting by Vendor

• By differentiating the types of stores the card
  is used in we can limit card purchases to only
  certain vendors

9
Inspiration Limiting by Product

• Hardware stores and construction supply stores
  have a wide selection of products for sale

10
Inspiration Limiting by Product

• Some of these items you do not want your
  employees to purchase on the company credit card

11
Inspiration Limiting by Product

• To guard against these unauthorized purchases,
  our solution will allow business leaders to
  customize specific items that each employee is
  allowed to buy from certain stores

12
Inspiration Setting spending limits

• Your companys budget is limited and fraudulent
  purchases can prohibit you from making necessary
  purchases

news.bbc.co.uk/1/hi/uk/3476815.htm
13
Inspiration Setting spending limits

• Per diem spending limits prohibits overspending
  with the company credit card by entrusted
  employees

news.bbc.co.uk/1/hi/uk/3476815.htm
14
Inspiration Data Mining

• A building site may need a certain amount of wood
  on a daily basis and many purchases are spur of
  the moment or outside of the original plan

news.bbc.co.uk/1/hi/uk/3476815.htm
15
Inspiration Data Mining

• The receipt tracking system is subjective and
  receipts can be misplaced

news.bbc.co.uk/1/hi/uk/3476815.htm
16
Inspiration Data Mining

• Online data mining makes tracking employee
  spending habits easier

news.bbc.co.uk/1/hi/uk/3476815.htm
17
Inspiration - Web Interface

• And all of these settings are easily customizable
  through a web interface on our webpage.

news.bbc.co.uk/1/hi/uk/3476815.htm
18
Solution - C3 Protection Card

• So what is C3P? Customizable Credit Card
  Protection

19
Credit Card Misuse

• Visa Business Card Spending
• 190 Billion in 2006
• EPA research
• Government Credit Card Holders
• 11 cannot produce receipts of purchases
• 9 of those that could be produced purchased
  prohibited items

http//www.epa.gov/oig/reports/1995/bankrep.htm
CHAPTER204
20
Examples of Credit Card Misuse

• 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
/
21
Examples of Misuse

• Surveyed Company
• Misuse Prevention
• 250,000 spent per year
• 100 per employee
• Corporate credit cards
• Responsibility of corporation
• Not card holder
• Company loses money on misuse

Admiral Julius Caesar
James Brunelle
22
Problem Characteristics

• Tracking physical receipts
• Labor Intensive
• Inaccurate
• Difficult to identify and filter misuse
• Unreliable
• Easy to lose
• Employees produced 20 of all transaction
  receipts
• Organization loses money
• Companies are reimbursing employees for
  unauthorized and personal purchases

http//www.dallasnews.com
23
Solution Concepts

• Regulate Types of Purchases
• Reduce Receipt checking
• Improve Accuracy
• Automatic prevention of prohibited purchases
• Improve reliability
• Organization saves money
• Keeps control of money in hands of employer

24
Solution Characteristics

• Customizable database
• Restrict Purchases by
• Universal Product Code (UPC)
• Only at participating locations in USA
• Merchant Commercial Code (MCC)
• Everywhere, including overseas
• Use Contact RFID Smart Cards
• Fast Secure
• Programmable for transaction routing
• Modifiable sending of UPCs and MCCs
• Software
• Web-based GUI
• User access for modification of card holder
  account
• Reporting and Analysis tools
• Drives Database

25
Software - Features

• Package includes
• GUI
• Database
• Checking software
• Customizable database to hold approved purchases
• 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

26
Software - Reporting and Analysis

• Employee purchases
• Tracked and listed by employee
• Online Receipt Tracking
• List accepted and rejected purchases
• Grouped by purchaser, date, and MCC

27
Major Functional Component Diagram
28
Getting C3P Cards
29
Modification of Database
30
Old Process of Making a Purchase
31
New Process of Making a Purchase
32
Purchase Verification
33
Vendor C3P Communication
34
Graphical User Interface - MCC
35
Graphical User Interface - UPC
36
Return on Investment

• Reduces fraud
• Corporate money is spent according to company
  policy
• Reduces loss of money due to unscrupulous
  purchases
• Saves time that would otherwise be used to
  perform manual audits
• Reduces the number of investigations required and
  their corresponding court costs

37
Management Plan
38
Management Plan - Communications

• Group Meetings
• Sun. 800 PM, Wed. 800 AM, Fri. 900 AM
• Minutes Assignments sent via e-mail
• Team web page
• Discussion
• Minutes
• Research
• Frequent Communications
• E-mail
• Phone

39
Management Plan - Tools

• Old Dominion University
• Labs
• Meeting Rooms
• Microsoft Project 2003
• Used to manage project

40
Development Plan - Software Solution

• An approximately 4,450 LOC solution including
• Networking package
• Accepts incoming connections
• Sends out data
• Database code
• Data lookup
• Web interface
• Users and administrators to view and edit
  information

41
Networking Package

• Networking program suite
• Uses an established networking library
• Allow incoming data from the modem
• Queuing logic mutual exclusivity
• Ensure no data loss or corruption
• Credit Card Data
• Format credit card data
• Forward it to the credit card company

42
Database Package

• Convert incoming transaction data
• MCC
• Place of purchase
• Purchase amount
• UPC
• Analysis engine
• Compare the pieces of incoming data with the
  allowed settings that are stored on the C3P MySQL
  server
• Database engine
• Stored and arrange data for formatting in reports

43
Database Fields

• Shall include the following
• Card ID number
• Card user name
• Company name of card user
• Approved list of MCCs
• Approved list of UPCs
• Company credit card number

44
Web Interface

• Written in PHP
• Easy-to-use interface
• Customers and administrators
• Update user information and products
• Provide access to spending reports
• Individuals groups
• Reports of misuse

45
Credit Card DataSecurity Standard

• Build and maintain a secure network
• Protect cardholder data
• Maintain a vulnerability management plan
• Implement strong access control measures
• Regularly monitor and test networks
• Maintain an information security policy

46
Evaluation Plan

• Financial
• Technical
• Schedule
• Personnel
• Weekly Progress Reports
• Unit and Acceptance Test
• Required to complete milestones
• Risks directly related to factors focused on

47
Marketing Plan

• Primary target market Businesses
• Advanced target market Concerned parents
• Corporate buy-in
• Benefits to the customer
• Initial businesses for beta testing
• Advertising Marketing strategy

48
Primary Target Market

• Users of Credit Cards
• Businesses
• Corporations
• Concerned Parents
• Initial phase Businesses
• Small businesses report billions of dollars in
  losses through embezzlement each year

http//www.fbi.gov/publications/financial/fcs_r
eport052005/fcs_report052005.htm
49
Primary Target Market

• Advanced Phases Concerned Parents
• Parents are concerned with giving children
  control of a credit card yet are even more
  concerned about giving a child real cash
• Minors are Credit Card Companys new target
  consumer

• http//www.bankrate.com/fox/news/cc/20000508.asp
• http//www.bankrate.com/fox/news/cc/20000508.a
  sp

50
Benefits to the customer

• Secure and efficient control of company funds
• Reduced costs to prevent and lessen the effects
  of fraud
• Parental control of children's spending

51
Corporate buy-in

• Benefits to the corporation
• Targeted stores receive
• business from C3P
• cardholders
• Advanced Phase Can request precedence in the GUI
  lookup

52
Initial businesses for beta test

• Initiate beta testing on local business
• E.D.O. S.A.I.C.
• Expressed interest and acknowledged
  innovativeness
• These companies alone reflect a loss due to
  credit card misuse

53
Overall Marketing Strategy

• Travel to the individual businesses
• Prove successful with single beta project
• Pursue a greater region of businesses
• Begin advertising campaign
• Receive corporate buy-in
• - Companies such as Target, Wal-Mart, Home
  Depot, etc.
• Take on full scale nationwide implementation
• Hit advertising mediums

54
Advertising Strategy

• Distribution
• Initial Roll-Out Get one credit company on board
• Advertising Mediums (Once onboard)
• National Newspapers
• Technology and business sections
• MarketPro Technology Shows
• TV/Internet

55
Ways to Use C3P

• Leasing
• Rent Server and Database
• Buy Software Package
• C3P Controlled and Maintained
• No initial costs
• Only service fee and leasing fee
• Buying
• Buy Server and Database
• Buy Software Package
• Controlled within corporation
• Initial fee
• Maintainence fee
• Eliminates Privacy concerns if sensitive data is
  stored in Database

56
Competition Matrix
Uses existing card readers
Tracks purchases and patterns
Customizable database of MCC
Customizable purchase restrictions
Can set Spending Limits
Blacks-out MCC codes
Blacks out UPC codes
Prevents Duplication
For Government Use
For Personal Use
For Business Use
Cards
57
Milestones and Deliverables
Phase 1 (CS411) Software Requirements
Document Design Document Application Code Data
Mining Code Formatting Code Demonstration
Prototype Completed Prototype Testing Test Plan
Document SBIR document NSF SBIR Proposal Phase 2

• Phase 0 (CS410)
• Feasibility Presentation
• Team website
• Presentation
• Milestone Presentation
• Presentation
• Final Presentation
• Product Website
• Presentation
• SBIR document
• NSF SBIR Proposal Phase 1

58
Milestones and Deliverables
Phase 2 Critical Design Hardware Hardware
Requirements Document Database Setup Software Req
uirements Document Design Document Database
Application Code POS Application Code Data Mining
Code Test Plan
Phase 3 Production Out Years Production Card
Company Contract Vendor Contract Financing Ventur
e Capital/Investment Distribution Distribution
Contract Marketing Advertising Campaign Launch
59
Schedule Overview

• Phase 0
• 4 months
• September 2006 to December 2006
• Phase 1
• 4 months
• January 2007 to May 2007

60
Schedule Overview

• Phase 2
• 17 months
• June 2007 to November 2008
• Phase 3 (Production Out Years)
• December 2008 and Beyond

61
Project Flow - Outline
62
Phase 0 Organization Chart
63
Project Flow Phase 0
64
Phase 1 Organization Chart
65
Project Flow Phase 1
66
Phase 2 Organization Chart
67
Project Flow Phase 2
68
Phase 3 Organization Chart
69
Project Flow Phase 3
70
Funding By Phase
71
Phase 1 Budget
72
Phase 2 Budget
73
Phase 3 Budget
74
Cost Per Customer

• Phase 3 Total Budget
• Charge each business this amount
• Make a profit
• Total Cost (Licensing per Year)
• Authentication code
• User manual
• Access to customizable database
• Programmed RFID cards
• POS Terminal Software for Vendors

75
Funding Plan

• National Science Foundation (NSF)
• Phase 1 Funding award up to 100k
• Proposal Deadline December 4, 2006
• Topic Information Technology
• Phase 1 Total Budget
• Phase 2 Funding award up to 750k or two years
  (whichever is reached first)
• Phase 2 Total Budget
• CIT Commercial Giving Program Commercial Finance
  Group
• Additional funds needed above the 100k and 750k
• No deadline

76
Funding Plan

• Phase 3 funding obtained through venture capital
  from outside investors
• Phase 3 Total Budget
• Total Budget (All phases)

77
Risk Management Plan

• Identify Risk
• Categorize risk based on severity and probability
• Reduce risks
• Evaluate risk level

78
Risk Reduction Methods

• Avoidance
• Acceptance
• Transference
• Mitigation

79
Risk Probability/Impact Matrix
80
Risks
81
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

82
Pros

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

83
Cons

• 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
• POS Terminals need updates

mastercard.com
84
Conclusion

• Regulates how funds are spent
• Saves money and time
• Vendors and credit customers will benefit
• Vendors will get higher quantity and more
  efficient business
• Credit customers are protected and have less
  wait-time in line
• Vendors will gain revenue from businesses that
  use UPC blocking
• C3P will revolutionize the credit system world
  wide

85
Questions
At this time, we welcome any questions you may
have.
86
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

87
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/rep
  orts/1995/bankrep.htmCHAPTER204
• How credit cards work http//money.howstuffworks.
  com/credit-card2.htm

88
Appendix A

• Expert Testimony from Admiral Julius Caesar from
  SAIC

89
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

90
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

91
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

92
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

93
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

94
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

95
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) example MCC 5598 Snowmobile Dealership
• 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)
  Sample UPC 02248604 Orbit Gum

96
Security - RFID

• 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