Credit Card Fingerprint Scanner
Grant Approval – Phase 1
A BioCharge Document
July 26, 2016
1
Organizational Chart
July 26, 2016
Grant Approval Presentation
A BioCharge Document
2
The New Currency
July 26, 2016
Grant Approval Presentation
A BioCharge Document
3
Societal Problem
 Current credit card systems do not provide a
reliable method for automatically preventing fraud
at the time of sales.
July 26, 2016
Grant Approval Presentation
A BioCharge Document
4
Monetary Importance to Society
The cost is shared by vendors, banks, and individuals
Credit Card Fraud Statistics Provided by Celent
July 26, 2016
Grant Approval Presentation
A BioCharge Document
5
American’s Who Have Been
Victims of Credit Card Theft within the Last 5 Years
6% of the Population
(17,490,000)
Population Reference Bureau
July 26, 2016
Federal Trade Commission Survey
Grant Approval Presentation
A BioCharge Document
6
I nt
ern
et
Fr
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Ea
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se
Re
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of
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ire
Pr
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t
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Re
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q
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on
ed
Ea
Ag
sil
a
yE
ins
tS
xp
Av
an
kim
ail
da
mi
ab
b
ng
le
ilit
yo
nC
ar
ds
Technical
Innovation
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
Grant Approval Presentation
A BioCharge Document
7
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.
July 26, 2016
Grant Approval Presentation
A BioCharge Document
8
Authorizing a Credit Card Sale
Do They Match
?
July 26, 2016
Grant Approval Presentation
A BioCharge Document
9
Objectives and Expected Goals
 Create a Credit Card System that is:





Secure
Reliable
Fast
Acceptable
Easily Implemented
July 26, 2016
Grant Approval Presentation
A BioCharge Document
10
Secure
Reliable
Easily
Acceptable
Implemented
Fast
 Current Security Flaws:
 Skimming
 Swipe and Clone
 Photography
Sample Skimmer Device
 Cell phone capture
 Use of Lost or Stolen Cards
 Dishonest Employees
 Obtaining CC data for unauthorized usage
July 26, 2016
Grant Approval Presentation
A BioCharge Document
11
Secure
Reliable
Fast
Easily
Acceptable
Implemented
Possible Fraud
Why not Possible
Skimming
Smart Card prevents it. Also Must
Have Matching Fingerprint
Lost or Stolen Card
User Must Have a Matching
Fingerprint
Adjustment of Template
This Would Require Reverse
Engineering of > 600K LOC.
Employee or Others Infiltrates Biometric Templates are Worthless
Our Database
Fake Fingerprints
July 26, 2016
Our Scanner Will Detect Them
Grant Approval Presentation
A BioCharge Document
12
Secure
Reliable
Fast
Easily
Acceptable
Implemented
Fingerprint Comparison Technique
 False Negative – Less than 2%
 False Positive – Nearly 0%
To Guarantee Accuracy Three Different Algorithms Will Be Tested
East Shore Technology - Provider of Fingerprint Algorithms
July 26, 2016
Grant Approval Presentation
A BioCharge Document
13
Secure
Reliable
Fast
Easily
Acceptable
Implemented
Extraction
Process
Instantaneous
~1 Second
Template
~1.5 Seconds
Template
Matching
Process
< 0.1 Second
East Shore Technology - Provider of Fingerprint Algorithms
July 26, 2016
Grant Approval Presentation
A BioCharge Document
14
Secure
Reliable
Fast
Easily
Acceptable
Implemented
• Total Automated Time – < 2 Seconds
Cashier
Judgment
PIN
Signature
July 26, 2016
Grant Approval Presentation
A BioCharge Document
15
Secure
Reliable
Fast
Easily
Acceptable
Implemented
 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
July 26, 2016
Grant Approval Presentation
A BioCharge Document
16
Secure
Reliable
Fast
Easily
Acceptable
Implemented
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
July 26, 2016
Grant Approval Presentation
A BioCharge Document
17
Secure
Reliable
Fast
Easily
Acceptable
Implemented
Survey Statistics
Resistance Ratio M/F
Female
14%
Male
86%
Female
Male
July 26, 2016
Grant Approval Presentation
A BioCharge Document
18
Secure
Reliable
Fast
Easily
Acceptable
Implemented
• Easy Adjustment for the Cashier
• Some Training for Activation
• Limited Segment of the Customers Updated
at Startup
• Extra Identification Only Needed at
Activation
• Fingerprint Protection Optional
July 26, 2016
Grant Approval Presentation
A BioCharge Document
19
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
July 26, 2016
Grant Approval Presentation
A BioCharge Document
20
Competition Breakdown
 Pay By Touch





Currently used in some Piggly Wiggly stores
Customer uses fingerprint to make purchases
Total transaction time is 10 - 20 seconds
Collects a series of points, not the whole print
Customers are still required to sign a credit card
receipt
July 26, 2016
Grant Approval Presentation
A BioCharge Document
21
Competition Breakdown
 Identix
 Handles fingerprint, iris, and face recognition
systems
 Scans using specific points on the finger
 Uses a centralized database to store data
obtained from scanned fingerprints
 Capable of checking 100,000 matches per
second
July 26, 2016
Grant Approval Presentation
A BioCharge Document
22
Advantages of BioCharge
 We’re Faster

Our system would not require a customer’s
signature for a credit card transaction


Saves time at checkout compared to Pay By Touch
Because we store data on the chip itself, we only
have to scan 10 – 20 prints, not millions


July 26, 2016
All of our competitors require a centralized database
Identix can scan 100,000 per second, but with a
database of nearly 25,000,000 cards, scanning
could take over four minutes per customer
Grant Approval Presentation
A BioCharge Document
23
Advantages of BioCharge
 We’re Safer
 Although
chances are virtually zero, in
the event of a false positive, the
transaction would still be rejected if the
name that comes up doesn’t match the
name on the physical card

July 26, 2016
The possibility exists for systems by both
Pay By Touch and Identix to falsely
identify someone and allow the
transaction to complete
Grant Approval Presentation
A BioCharge Document
24
POS Dataflow Diagram
July 26, 2016
Grant Approval Presentation
A BioCharge Document
25
Software Routines – Point of Sale
Card Reader
POS Terminal
• Graphical User Interface
• Drive Fingerprint
Algorithm
• Initiate CC Service
Program
•
•
•
•
Graphical User Interface
Capture Fingerprint
Extract Credit Card Data
Create Data-Packet
– Both Fingerprints
Backup Database
(Only When Needed)
July 26, 2016
Grant Approval Presentation
A BioCharge Document
26
Activation Data Flow Diagram
July 26, 2016
Grant Approval Presentation
A BioCharge Document
27
Software Routines - Activation
Card Writer
Customer Service
Terminal
• Graphical User Interface
• Drive CC Service
Program
• Database Application
• Graphical User Interface
• Extract Fingerprint
• Data Packet: The Fingerprint
& Customer Information
• Write Data on the Smart Card
Backup Database
July 26, 2016
Grant Approval Presentation
A BioCharge Document
28
Marketing Plan
 Franchise offering proprietary credit
 Supporting CC infrastructure available
 Funds to purchase & implement technology
 Customer base that will yield successful
implementation
July 26, 2016
Grant Approval Presentation
A BioCharge Document
29
Initial Target Market
 Sears*
 Best Buy
 Wal-mart
 Circuit City
 Dillard’s
 BJ’s
 JC Penny
 Sam’s Club
 Lowe’s
 Costco
 Home Depot
 TJ Max
 Target
 Macy’s
 Lord & Taylor
 Kohl’s
July 26, 2016
Grant Approval Presentation
A BioCharge Document
30
Primary Target Market
 SEARS ROEBUCK (NYSE:S)





July 26, 2016
25 million active credit accounts
872 mall-based stores & 1300 outlet locations
Annual Revenue $41B – Annual Profit $15.7B
Predominantly female customer base
$30,000 per year in credit card fraud lost per store
Grant Approval Presentation
A BioCharge Document
31
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
July 26, 2016
Grant Approval Presentation
A BioCharge Document
32
Long Term Market Strategy
 Use Sears’ relationship with Citigroup to launch
Visa and MasterCard campaign
 Work with fingerprint scanner manufacturers to
develop and market technology for home based
fingerprint scanners for secure online purchases
July 26, 2016
Grant Approval Presentation
A BioCharge Document
33
Objectives - Pros







Secure, Reliable, Fast, Acceptable, Easily
Implemented, and it Works
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
July 26, 2016
Grant Approval Presentation
A BioCharge Document
34
Objectives - Cons
 Imposes initial cost upon retailers
 Intrusive to a subset of customers
 Creates a target for biometric sabotage
July 26, 2016
Grant Approval Presentation
A BioCharge Document
35
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
July 26, 2016
Grant Approval Presentation
A BioCharge Document
36
Project Plans
 Management Plan
Ensures that all Project Objectives are achieved

 Evaluation Plan
Verifies the success of all critical components

 Funding Plan
Secures funds necessary for project completion

 Resource Plan

Controls resources by project phase
 Staffing Plan

Achieves staff requirements by project phase
July 26, 2016
Grant Approval Presentation
A BioCharge Document
37
Management Plan
 Periodic review of financials to ensure that
expenses will not overrun available funds
 Upkeep of customer relations to guarantee
satisfaction with initial beta implementation
 Conceive & Execute market strategy to attain
profit yielding new business
July 26, 2016
Grant Approval Presentation
A BioCharge Document
38
Evaluation Plan
 Design Inspections

Certifies that all desired functionality is met
 Code Reviews

Proven to remove high percentage of bugs
 Module Testing

Verifies successful development of components
 Integration Testing

July 26, 2016
Ensures proper assembly of all integrated parts
Grant Approval Presentation
A BioCharge Document
39
Funding Plan
 Capture SBIR funds by submitting timely and
polished proposals
 Solicit additional seed funding from Investment
Banking firms

Morgan Stanley, Goldman Sachs, etc.
 Enlist services of brokers and Venture Capitalist
to further potential funds

Putnam, BlackRock, http://www.funkventures.com
 Attend Venture Capitalist seminars
 Attract Angel Investors
July 26, 2016
Grant Approval Presentation
A BioCharge Document
40
Resource Plan
 Resources are to be controlled and acquired
through the management level


Avoids frivolous expenses
Holds accountability per department
 All major resources are to be budget approved
and signed off on by upper management.


Ensures wise purchase decisions
Avoids potential conflicts with management plans
July 26, 2016
Grant Approval Presentation
A BioCharge Document
41
Staffing Plan
 Phase 1

Need based staffing plan


Gains the benefits of specialization
Cuts costs due to employment time
 Out years


Setup outsourcing relations for technical support
Rely on proven and experienced staff for further
development with little to no consulting.
July 26, 2016
Grant Approval Presentation
A BioCharge Document
42
Phase 1 - Initiation
July 26, 2016
Grant Approval Presentation
A BioCharge Document
43
Phase 1 - Milestones
 Finalize all Phase 0 Revisions
 Draft Phase Specific Documents
 Engage Legal Experts and Financiers
 Develop Prototype
 Complete Phase II Grant Proposal
 Update Web Detail
 End Phase Analysis
July 26, 2016
Grant Approval Presentation
A BioCharge Document
44
Phase 1 - Deliverables
 Updated Project Plan with Phase I focus
 Phase specific Test Plans, Design docs, etc.
 Legal Contracts and Documents
 List of Prospective Investors
 Completed Concept Prototype
 Polished Phase II Grant Proposal
 Documented Postmortem and Transition Plan
July 26, 2016
Grant Approval Presentation
A BioCharge Document
45
Justification of schedule Durations
July 26, 2016
Grant Approval Presentation
A BioCharge Document
46
Justification of schedule Durations
July 26, 2016
Grant Approval Presentation
A BioCharge Document
47
Justification of schedule Durations
July 26, 2016
Grant Approval Presentation
A BioCharge Document
48
Justification of schedule Durations
July 26, 2016
Grant Approval Presentation
A BioCharge Document
49
Justification of schedule Durations
July 26, 2016
Grant Approval Presentation
A BioCharge Document
50
Project Budget
 Budget Component 1 – Staffing
 Labor resources enabling project completion
 Staffing Subtotal - $37,339
 Budget Component 2 – Software
 Resources to develop & test design
 Software Subtotal - $4,961
 Budget Component 3 – Hardware
 Resources to physically implement product
 Hardware Subtotal - $17,629
July 26, 2016
Grant Approval Presentation
A BioCharge Document
51
Budget Justification - Staffing
Staff Description
Staff Justification (Optional)
Hours
needed
Annual
Salary
Hourly
Total
Cost
Project Manager
160
$80,288
$38.60
$6,176
Legal & Documentation
Manager
160
$72,971
$35.08
$5,613
Marketing Manager
160
$52,500
$25.24
$4,038
Quality Assurance Manager
160
$64,021
$30.78
$4,925
Senior Hardware Engineer
160
$51,773
$24.89
$3,983
Senior Software Engineer
160
$59,253
$28.49
$4,558
Webmaster
160
$54,681
$26.29
$4,206
10
$66,560
$32.00
$320
100
$70,964
$32.00
$3,200
10
$35,703
$32.00
$320
Staffing Subtotal
$37,339
Credit Card Service Consultant
Expert analysis on Credit Card Data
Biometric Consultant
Expert analysis on Biometric
Technical Writing Consultant
Edit Documents
July 26, 2016
Grant Approval Presentation
A BioCharge Document
52
Budget Justification - Software
Software Name
Comments
Quantity
Borland C++ Licenses
4
Price
Total
Cost
$969
$3,876
MySQL
$0
$0
Java (part of Linux)
$0
$0
East Shore Fingerprint
Algorithm
1
$100
$100
NIST Testing Fingerprint
Database
1
$90
$90
Antheus Inc. Fingerprint
Algorithm
1
$895
$895
Software Subtotal
July 26, 2016
Grant Approval Presentation
A BioCharge Document
$4,961
53
Budget Justification - Hardware
Hardware Name
Comments
Quantity
Price
Total
Cost
Desktop Computers
For individual system pricing, see SBIR 6.2
5
Varies
$7,500
Laptop Computers
For individual system pricing, see SBIR 6.2
4
Varies
$6,804
Workstations
For individual system pricing, see SBIR 6.2
2
Varies
$2,689
Fingerprint Scanners
1
$196
$196
Smart Card Readers
1
$200
$200
50
$2
$100
1
$140
$140
Smart Cards
Smart Card Writers
Hardware Subtotal
July 26, 2016
Grant Approval Presentation
A BioCharge Document
$17,629
54
Budget Summary – Phase 1
Staffing Subtotal
$37,339
Software Subtotal
$4,961
Hardware Subtotal
$17,629
Phase 1 Subtotal
$59,929
Staff Overhead 40%
$14,936
Phase 1 Grand Total
$74,865
SBIR 1 Funding
$75,000
Phase 1 Surplus
$135
July 26, 2016
Grant Approval Presentation
A BioCharge Document
55
Commercial Profits
 Customer Return on Investment

Sears Example
 Corporate Profits

Company Profit Analysis
July 26, 2016
Grant Approval Presentation
A BioCharge Document
56
Return on Investment - Sears

Total Implementation Cost
 (#
of stores) * (avg. # of registers) * (1500)
 Sears Ex: 872 * 40 * 1500 = $52,320,000

Return on Investment to occur in n years
n
= (Implementation Cost)/(Annual Fraud Cost)
 Sears Ex: $52,320,000/(872*30,000) = 2 years
Of course, the increase in budget also pushes back the approximate return on investment date. According to the new data, after only two years, the system will have completely paid for itself, and the stores have the
potential to realize an additional $26 million in increased profit after this time due to fraud prevention.
July 26, 2016
Grant Approval Presentation
A BioCharge Document
57
Corporate Profits
Funding
Profit Analysis
Phase 0 Cost
$0
Phase 1 Cost
$74,865
Phase 2 Cost
$1,211,348
Phase 3 Cost
$827,738
Investment Payback
Investment Payback Interest 7%
Investment Payback Total
$1,739,086
$121,736
$1,860,822
Production cost per unit
$800
$300
SBIR Phase 1 Funding
$74,865
Cost per unit training/installation
SBIR Phase 2 Funding
$300,000
Sales price per unit
Loan Phase 2
$911,348
Profit per unit
$400
Loan Phase 3
$827,738
Break even – Units Sold
4652
$2,113,951
Break even – Total Sales
$6,978,000
Total Development Cost/Funding
July 26, 2016
$2,113,951
Grant Approval Presentation
A BioCharge Document
$1,500
58
Corporate Profits
Break Even - Sales
$3,500,000
$3,000,000
Net Income
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$0
1
274 547 820 1093 1366 1639 1912 2185 2458 2731 3004 3277 3550 3823 4096 4369 4642 4915 5188 5461 5734 6007 6280 6553 6826 7099 7372
Units Sold
Sales
July 26, 2016
Break Even
Grant Approval Presentation
A BioCharge Document
59
Approval For Continuation
 Proof of need

Billions of dollars in monetary damage to US
consumers and businesses
 Proof of Feasibility

Technology necessary exists and is readily
available for such implementation
 Proof of Marketability

Acceptance demographic and acceptance of
society growing
 Do you approve?
July 26, 2016
Grant Approval Presentation
A BioCharge Document
60