The Credit Card Finger
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A BIOCHARGE DOCUMENT
Elaboration of Feasibility
July 26, 2016
1
Organizational Chart
July 26, 2016
Feasibility – A BIOCHARGE Document
2
Societal Problem

Current credit card systems do not provide
a reliable method for automatically
preventing fraud at the time of sales.
July 26, 2016
Feasibility – A BIOCHARGE Document
3
Id Theft Annual Complaints
250,000
214,905
200,000
161,836
150,000
100,000
86,212
50,000
0
2001
2002
2003
“National and State Trends in Fraud & Identity Theft” 2003.
Federal Trade Center
July 26, 2016
Feasibility – A BIOCHARGE Document
4
American’s Who Have Been
Victims of ID Theft
5.5 % of the Population
(16,032,500)
Star System ID Theft Report
July 26, 2016
Population Reference Bureau
Feasibility – A BIOCHARGE Document
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Identity Theft Costs


In 2003, $53 Billion Loss Due to Identity
Theft
The Cost is shared by Vendors, Banks, and
Individuals
“National and State Trends in Fraud & Identity Theft” 2003.
Federal Trade Center
July 26, 2016
Feasibility – A BIOCHARGE Document
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Types of Identity Theft
33%
35%
30%
25%
21%
19%
20%
17%
15%
11%
8%
10%
6%
5%
0%
CreditCards
Card
Credit
Utility
Other
Bank
Employment
Government
Loan
“National and State Trends in Fraud & Identity Theft” 2003. Federal Trade Center
Percentages add to more than 100 because ~19% of victims experience more
than one type of ID theft.
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Feasibility – A BIOCHARGE Document
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Problem Characteristics

Point of sales purchases involving credit
cards are subject to security flaws that allow
for fraud in various ways, including:

Skimming


Photography


Swipe and Clone
Cell phone capture
Sample Skimmer Device
Dishonest Employees

July 26, 2016
Obtaining CC data for unauthorized usage
Feasibility – A BIOCHARGE Document
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Problem Costs



Retailers have to absorb 55% of the cost of
credit card fraud.
Businesses pass these costs on to their
customers in the form of higher prices,
interest rates, and fees.
Consumer frustration is heightened by
inconvenience, inflated prices, and time
wasted being victim to credit card fraud.
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Feasibility – A BIOCHARGE Document
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I nt
ern
et
Fra
Sto
ud
re
Pr
Pu
ote
rch
c ti
Au
as
on
t om
eF
at e
rau
d
Ca
dP
sh
rot
ie r
ec
Ju
t io
Cu
d
n
gm
s to
e
me
nt
rM
No
Ea
em
tR
se
eq
ory
of
uir
Us
No
Pr
ed
e
tR
ote
eq
c ti
uir
on
ed
Ea
Ag
sil
a in
yE
st
xp
Sk
Av
an
im
ail
da
mi
ab
ble
ng
ilit
yo
nC
a rd
s
Current Protection
Shortcomings
Main Disadvantage
X
X
Some
Very Little Fraud
Protection
X
X
X
All
Cashier does not
compare regularly
X
X
X
Few
Change of appearance &
Limit authorized users
Most
Address readily available
& Cashier judgment
X
Most
Does not protect against
stolen cards
N/A
N/A
Fraud protection only for
internet purchases
Some
Password anxiety
& PIN can be discovered
Few
Very few smart card
readers in US.
X
Gasoline Speed Pass
Signature
Customer Picture on
Card
Address Verification
Card Verification
Value
Encryption of CC
Numbers
Pin with Hardware
Security Models
Smart Cards
CCFPS
*
July 26, 2016
- Future implementation
X
X
X
X
X
X
X
*
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Big Brother
N/A - Not Applicable
Feasibility – A BIOCHARGE Document
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Problem Solution

Implement a hardware/software package
that will verify biometric data stored on a
credit card to that of its cardholder at the
time of each transaction.
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Biometric Authorization Benefits

Makes CC fraud at point of sales virtually
impossible




Saves retailers money
Will yield lower product costs because retailers
will no longer have to raise prices to offset
monetary losses due to point of sale credit fraud
Eliminates time required to investigate and
handle incidents of fraud
Protects consumers
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Feasibility – A BIOCHARGE Document
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Functional Diagram
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Alternative Biometric Techniques

DNA Testing




Expensive
Requires laboratory examination
Impractical due to DNA sample required
Retinal Scans


Too costly for wide scale implementation
Intrusive element of scanning customer’s eye
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Feasibility – A BIOCHARGE Document
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Fingerprint Scan Technique

Reliable / Accurate



Algorithm used will be NIST Compliant
Based on real data, matching algorithms can be
in the upper 90% accuracy (It is nearly
impossible to eliminate all false negatives)
During testing we can adjust the threshold of the
algorithm to make our system have nearly 0%
false positive (The scale is between false
negatives and false positives)
East Shore Technology - Provider of Fingerprint Algorithms
July 26, 2016
Feasibility – A BIOCHARGE Document
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Fingerprint Scan Security
Possible Fraud
Why not Possible
Template used to produce fingerprints They do not receive a scan of the finger
just the template
They try to use the card as is
With the fingerprint option, the card is
not usable without a matching
fingerprint
A criminal tries to adjust the template
to match their finger
They would have reverse engineer >
600K LOC to tamper with the template
A criminal infiltrates our database
Biometric data would be worthless
They could produce a fake finger
from one of your actual fingerprints
Our scanner will detect fake fingers
Smart Card Technology and Encryption add to the Security
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Feasibility – A BIOCHARGE Document
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Second Tier Market Analyzed

Five day poll held





Gathered information of CC bearing individuals
Introduced our goal of biometric authorization
Collected their opinions & reservations
Received over 150 responses
Well-rounded collection of second tier
consumer market sentiment
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Feasibility – A BIOCHARGE Document
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Survey Statistics
Male/Female Ratio
Female 43%
Male 57%
Male
Female
Survey sample of 167 people
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Survey Statistics
Approval Percentage
Highly Resistant 11%
Highly Accepting 40%
Somew hat Resistant 11%
Somew hat Accepting 38%
Highly Accepting
Somewhat Accepting
Somewhat Resistant
Highly Resistant
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Survey Statistics
Resistance Ratio M/F
Female
14%
Male
86%
Female
Male
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Target Market








Sears*
Wal-mart
Dillard’s
JC Penny
Lowe’s
Home Depot
Target
Lord & Taylor
July 26, 2016








Best Buy
Circuit City
BJ’s
Sam’s Club
Costco
TJ Max
Macy’s
Kohl’s
Feasibility – A BIOCHARGE Document
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Target Market Defined

Franchise offering proprietary credit

Supporting CC infrastructure available

Funds to purchase & implement technology

Customer base that will yield successful
implementation
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Initial Target

SEARS ROEBUCK (NYSE:S)

25 million active credit accounts

872 mall-based stores & 1300 outlet locations

Annual Revenue $41B – Annual Profit $15.7B

Predominantly female customer base
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Market Strategy






Prove successful with single beta project
Pursue a networked region of stores
Take on full scale nationwide implementation
Acquire more business with same POS scope
Engage CC issuers of Visa, MasterCard, AMEX
Secure online purchases
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Objectives - Pros






Offers a better form of fraud protection
than currently in place
Automates authorization process
Alleviates password anxiety
Eliminates cashier judgment
Monetary/Time savings due to the reduced
incidents of fraud
Cloning not as accessible and made much
more complex
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Feasibility – A BIOCHARGE Document
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Objectives - Cons

Imposes initial cost upon retailers

Intrusive to a subset of customers

Creates a target for biometric sabotage
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Major Risk Issues



Exhaust funding before project completion
Protection of biometric data from
government or other agencies
Confront law suits relating to illegal invasion
of customer databases
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Cost To Customer

$1,000 USD per register



$300 – Hardware and Software
$300 – Installation and Training
$400 – Research, Development, Deployment Cost
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Supplemental Data
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Component Cost
Software
$25
Fingerprint Scanner
$100
Credit Card Scanner
$140
Encasing for the hardware
$25
Logic Circuits
$10
Total Cost
July 26, 2016
$300
Feasibility – A BIOCHARGE Document
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Development Timeline
July 26, 2016
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Employee Expense (R&D)
Staff
Salary
R&D Term
Total
Project Manager
75,000
2Yrs
$150,000
Web Designer and GUI interface
60,000
2Yrs
$120,000
Software Engineer - Senior
60,000
2Yrs
$120,000
Software Engineer
55,000
2Yrs
$110,000
Hardware
40,000
2Yrs
$80,000
Marketing
72,000
2Yrs
$144,000
Human Resources
71,000
2Yrs
$142,000
Legal Fees
68,000
2Yrs
$136,000
Salary
$1,002,000
Employee Overhead (35% of Salary)
$350,700
Employee Expense
July 26, 2016
$1,352,700
Feasibility – A BIOCHARGE Document
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Software Expense (R&D)
Software for Development & Testing
Total
Fingerprint Algorithm
$2,650
Testing Database
$500
Software Expense
$3,150
July 26, 2016
Feasibility – A BIOCHARGE Document
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Facility Expense
Facility Expenses
Individual Cost
# Of Items
Total
Computers
1,200
13
$15,600
Laptops
1,500
2
$3,000
Network
4,000
1
$4,000
Printer/copier/ scanner
250
1
$250
Local Printer
150
2
$300
Furnishings
60,000
1
$60,000
T1 Line (Internet Connectivity)
10,800
2Yrs
$21,600
311,250
2Yrs
$622,500
Energy
16,738
2Yrs
$33,476
Other Utility
20,000
2Yrs
$40,000
Petty Cash
10,000
2Yrs
$20,000
Stationary / Misc
10,000
2Yrs
$20,000
Rent
Facility Expense
July 26, 2016
$840,726
Feasibility – A BIOCHARGE Document
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Beta Testing Expense (R&D)
Terminals for Beta Test
July 26, 2016
# Of Locations
Terminal Cost
# Of Terminals
Total
3
600
10
$18,000
Feasibility – A BIOCHARGE Document
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R&D Expense
Employee Expense
$1,352,700
Software Expense
$3,150
Facility Expense
$840,726
Testing Expense
18000
Grand R&D Total
July 26, 2016
$2,214,576
Feasibility – A BIOCHARGE Document
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Data Flow Diagram
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Survey Statistics
Age Breakdown
50-59
8%
60-69
2%
over 70
2%
under 18
2%
18-24
35%
40-49
13%
under 18
18-24
25-29
30-39
40-49
30-39
16%
50-59
60-69
25-29
22%
July 26, 2016
Feasibility – A BIOCHARGE Document
70 plus
38
Survey Statistics
Credit Card Fraud Victims
Yes
19%
No
81%
No
Yes
July 26, 2016
Feasibility – A BIOCHARGE Document
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Survey Statistics
Acceptance Ratio M/F
Male
49%
Female
51%
Female
Male
July 26, 2016
Feasibility – A BIOCHARGE Document
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Survey Statistics
Acceptance Income
Over $100K
5%
$70K - $99K
8%
No Answer
17%
No Answer
Under $20K
$50K - $69K
11%
$20K - $29K
$30K - $49K
Under $20K
28%
$30K - $49K
19%
$50K - $69K
$70K - $99K
$20K - $29K
12%
July 26, 2016
Feasibility – A BIOCHARGE Document
Over $100K
41
Survey Statistics
Resistance Income
Over $100K
11%
No Answer
16%
$70K - $99K
11%
Under $20K
21%
$50K - $69K
8%
No Answer
Under $20K
$20K - $29K
$30K - $49K
$30K - $49K
22%
$20K - $29K
11%
$50K - $69K
$70K - $99K
Over $100K
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Sources Consulted
“ANSI – Data Format for the Interchange of Fingerprint… Information.” Nist Special Publication. 1-2000.
NIST US Department of Commerce.
ftp://sequoyah.nist.gov/pub/nist_internal_reports/sp500-245-a16.pdf
Fleet Credit Card Services. “Smart Card Teminology.” http://cards.fleet.com/card_features/terminology.shtml
Lammond, Keith. “Credit Card Transactions Real World and Online.” 1996.
http://www.virtualschool.edu/mon/ElectronicProperty/klamond/credit_card.htm
Leydon, John. “How to Get a Pin Number in 15 Guesses.” The Register. 12 Mar. 2004.
http://www.theregister.co.uk/content/55/29425.html.
“National and State Trends in Fraud & Identity Theft.” 2003. Federal Trade Center.
http://www.consumer.gov/sentinel/pubs/Top10Fraud2003.pdf
Prabhakar, Salil, Anil Jain. “Fingerprint Identification.” Biometrics at Michigan State University.
http://biometrics.cse.msu.edu/fingerprint.html
Smith, Adam. Congressman Washington’s Ninth District. “Smith Introduces Identity Theft Bill.” October,
2002. http://www.house.gov/apps/list/press/wa09_smith/021010pr.htm
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