19-04-2011, 09:56 AM
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INTRODUCTION
1.1 OVERVIEW
The 21st century will not be "cashless", as many now predict. However, it does seem clear that the currency of the 21st century will be "paperless". Paper currency and checks are gradually being supplanted by smartcards, digital cash and instant transfers of funds. The large paper bureaucracy of banks is quickly becoming redundant, burdensome, even antiquated. The evolution in digital money is happening so fast that banks cannot adopt quickly enough and will eventually collapse like top-heavy giants, blown over by the winds of financial change. The wallet of the future will hold less paper cash, coins and magnetic stripe cards. It will instead hold Money Pad containing digital cash and other financial information, updated by a PDA with a satellite communication link.
As the new technologies develop new ways of making payment, one concern naturally arises. Will this technology protect each individual's right to privacy while providing the sound money needed for the economic health of communities? The answer is simple — it depends on how the new technology is used. There is nothing inherent in the technology that makes it less protective of privacy and individual rights. Advancement's like Biometrics Technology has made individual privacy even more secure.
As developments in electronic money gather pace, protection of individual rights must be kept in focus. Because the record of most governments so far in these early stages of electronic commerce has been seen by many to be confrontational and not protective of individual rights, it is likely that the preservation of these rights is one reason that private currencies are likely to emerge on the Internet and to eventually play an important role in global commerce.
In order to protect the rights and properties of each individual we thought of providing a security system, which every human being can understand and feel free to use. Human beings feel secure when they have their own security arrangements to protect their rights and as well as wealth. Biometrics Technology is used to develop an e-cash handling system, which is similar to well known credit cards and smart cards. The e-cash handling system is a device that facilitates secure currency transactions. We call it Money Pad which recognizes Finger Prints of the user and decides whether the user is an authorized person or not. Every time the user wants to access Money Pad he has to make an impression of his finger, which will be sensed and matched with the one in the hard disk. If the finger print matches with the user's he will be allowed to access and use the Pad otherwise the Money Pad is not accessible.
1.2 WHAT IS BIOMETRICS?
Biometric technology is defined as automated methods of identifying or authenticating the identity of a living person based on unique physiological or behavioral characteristics. Biometrics can provide very secure and convenient authentication for an individual since they cannot be stolen or forgotten and are very difficult to forge.
• A physiological characteristic is a relatively stable physical characteristic, such as an individual’s fingerprint, hand geometry, iris pattern, or blood vessel pattern on the back of the eye. This type of biometric measurement is usually unchanging and unalterable without significant duress to the individual.
• A behavioral characteristic is more a reflection of an individual’s psychological makeup. A signature is the most common behavioral biometric used for identification. Because most behavioral characteristics vary over time, an identification system using these must allow updates to be enrolled
CHAPTER 2
LITERATURE
2.1 PRESENT APPROACH
Presently due to the usage of computers in almost all the fields the demand for the utilization of electronic money has increased. Payments made today in nearly all of the deposit currencies in the world’s banking system are handled electronically through a series of interbank computer networks. Credit cards and smart cards are widely used to enter into these interbank computer networks in order to perform transactions. These are the popular medium widely existing as a recent medium of currency in the e-cash scenario
The mode of usage and the security provided by these currency mediums are as follows:
2.1.1 CREDIT CARD
Credit cards are payment devices that allow the consumer to make purchases within certain guaranteed limits as defined by the issuer of the card. To use a credit card in most cases it is sufficient to present the merchant with the card number and the cardholder's name and expiration date of the card. These data can be conveniently transmitted over the Internet. Furthermore, credit cards process funds by electronic means. The user has to swap the card in the card reader machine then the machine asks for authentication information like password Later the user is allowed to perform the transaction.
Disadvantages:
Instant clearing of funds is not possible.
User is always under the pressure of limits on purchase defined by the issuer of the card and also every transaction involves certain charges.
Insecure transactions using fixed encryption.
The card has to be renewed once it is expired.
2.1.2 SMARTCARDS
A smartcard resembles a credit card except that it has a microchip embedded within it, which allows the smartcard to store information and sometimes to even perform simple calculations. Common smartcard chips typically holds about 8,000 bytes (characters) of information, which enables the smartcard to perform a variety of functions such as identification, storing bank account information and holding digital cash. Payment information in the form of currency value is stored on this chip and can be retrieved with specially designed card readers
Disadvantages:
Insecure transactions using fixed encryption.
Risk of data loss due to chip failure.
2.1.3 ELECTRONIC PURSES AND DEBIT CARDS
Despite the increasing flexibility, relationship-based cards are credit based and settlement occurs at the end of the billing cycle. There remains a need for a financial instrument to replace cash. To meet this need banks, credit card companies, and even government institutions are racing to introduce "electronic purses," that are wallet-sized smart cards embedded with programmable microchips that store sums of money for people to use instead of cash for everything from buying food, to making photocopies, to paying subway fares.
After the purse is loaded with money, at an ATM or through the use of an inexpensive special telephone, it can be used to pay for say, candy in a vending machine equipped with a card reader. The vending machine has to verify the authenticity of the card and check if enough money is available for a chocolate bar. Then the value of the purchase is deducted from the banker on the card and added to an e-cash box in the vending machine. The remaining balance on the card is displayed by the vending machine or can be checked at an ATM or with a balance-reading device. Electronic purses would virtually eliminate fumbling for change or small bills in a busy store or rush-hour toll booth, waiting for a credit card purchase to be approved. This allows customers to pay for rides and calls with a prepaid card that "remembers" each transaction. And when the balance on an electronic purse is depleted, the purse can be recharged with more money. As for the vendor, the receipts can be collected periodically in person—or, more likely, by telephone and transferred to a bank account.
While the technology has been available for a decade, the cards have been relatively expensive, from $5 to $10. Today the cards cost $1, and special telephones that consumers could install at home to recharge the cards are projected to cost as little as $50. A simple card reader would cost a merchant less than $200.
Advantages
For banks, the advantage is reduction in handling of cash and checks which
have to be transported securely and are labor intensive to handle. Electronic purses
are also seen as means to protect the bank and the card holder relationship which is perceived to be important in today’s’ competitive world
For the retailer, the advantage is the reduction in handling of currency and check. This
includes reducing the delay in money being credited to the retailer’s account.
Another advantage is the reduction in the risk of theft
Disadvantages
Real problem arises if the purse operator goes bankrupt. This is because the card user has exchanged real money, whose value is guaranteed by the state within certain limits, for electronic money in a smart card. If the purse operator goes bankrupt, the electronic money can suddenly become worthless, and the user will have lost his or her money
Another significant drawback for the user is what the card holder can do if the purse no longer works. If the purse is anonymous, then not even the purse system operator can determine the amount of money that was loaded into the purse
INTRODUCTION
1.1 OVERVIEW
The 21st century will not be "cashless", as many now predict. However, it does seem clear that the currency of the 21st century will be "paperless". Paper currency and checks are gradually being supplanted by smartcards, digital cash and instant transfers of funds. The large paper bureaucracy of banks is quickly becoming redundant, burdensome, even antiquated. The evolution in digital money is happening so fast that banks cannot adopt quickly enough and will eventually collapse like top-heavy giants, blown over by the winds of financial change. The wallet of the future will hold less paper cash, coins and magnetic stripe cards. It will instead hold Money Pad containing digital cash and other financial information, updated by a PDA with a satellite communication link.
As the new technologies develop new ways of making payment, one concern naturally arises. Will this technology protect each individual's right to privacy while providing the sound money needed for the economic health of communities? The answer is simple — it depends on how the new technology is used. There is nothing inherent in the technology that makes it less protective of privacy and individual rights. Advancement's like Biometrics Technology has made individual privacy even more secure.
As developments in electronic money gather pace, protection of individual rights must be kept in focus. Because the record of most governments so far in these early stages of electronic commerce has been seen by many to be confrontational and not protective of individual rights, it is likely that the preservation of these rights is one reason that private currencies are likely to emerge on the Internet and to eventually play an important role in global commerce.
In order to protect the rights and properties of each individual we thought of providing a security system, which every human being can understand and feel free to use. Human beings feel secure when they have their own security arrangements to protect their rights and as well as wealth. Biometrics Technology is used to develop an e-cash handling system, which is similar to well known credit cards and smart cards. The e-cash handling system is a device that facilitates secure currency transactions. We call it Money Pad which recognizes Finger Prints of the user and decides whether the user is an authorized person or not. Every time the user wants to access Money Pad he has to make an impression of his finger, which will be sensed and matched with the one in the hard disk. If the finger print matches with the user's he will be allowed to access and use the Pad otherwise the Money Pad is not accessible.
1.2 WHAT IS BIOMETRICS?
Biometric technology is defined as automated methods of identifying or authenticating the identity of a living person based on unique physiological or behavioral characteristics. Biometrics can provide very secure and convenient authentication for an individual since they cannot be stolen or forgotten and are very difficult to forge.
• A physiological characteristic is a relatively stable physical characteristic, such as an individual’s fingerprint, hand geometry, iris pattern, or blood vessel pattern on the back of the eye. This type of biometric measurement is usually unchanging and unalterable without significant duress to the individual.
• A behavioral characteristic is more a reflection of an individual’s psychological makeup. A signature is the most common behavioral biometric used for identification. Because most behavioral characteristics vary over time, an identification system using these must allow updates to be enrolled
CHAPTER 2
LITERATURE
2.1 PRESENT APPROACH
Presently due to the usage of computers in almost all the fields the demand for the utilization of electronic money has increased. Payments made today in nearly all of the deposit currencies in the world’s banking system are handled electronically through a series of interbank computer networks. Credit cards and smart cards are widely used to enter into these interbank computer networks in order to perform transactions. These are the popular medium widely existing as a recent medium of currency in the e-cash scenario
The mode of usage and the security provided by these currency mediums are as follows:
2.1.1 CREDIT CARD
Credit cards are payment devices that allow the consumer to make purchases within certain guaranteed limits as defined by the issuer of the card. To use a credit card in most cases it is sufficient to present the merchant with the card number and the cardholder's name and expiration date of the card. These data can be conveniently transmitted over the Internet. Furthermore, credit cards process funds by electronic means. The user has to swap the card in the card reader machine then the machine asks for authentication information like password Later the user is allowed to perform the transaction.
Disadvantages:
Instant clearing of funds is not possible.
User is always under the pressure of limits on purchase defined by the issuer of the card and also every transaction involves certain charges.
Insecure transactions using fixed encryption.
The card has to be renewed once it is expired.
2.1.2 SMARTCARDS
A smartcard resembles a credit card except that it has a microchip embedded within it, which allows the smartcard to store information and sometimes to even perform simple calculations. Common smartcard chips typically holds about 8,000 bytes (characters) of information, which enables the smartcard to perform a variety of functions such as identification, storing bank account information and holding digital cash. Payment information in the form of currency value is stored on this chip and can be retrieved with specially designed card readers
Disadvantages:
Insecure transactions using fixed encryption.
Risk of data loss due to chip failure.
2.1.3 ELECTRONIC PURSES AND DEBIT CARDS
Despite the increasing flexibility, relationship-based cards are credit based and settlement occurs at the end of the billing cycle. There remains a need for a financial instrument to replace cash. To meet this need banks, credit card companies, and even government institutions are racing to introduce "electronic purses," that are wallet-sized smart cards embedded with programmable microchips that store sums of money for people to use instead of cash for everything from buying food, to making photocopies, to paying subway fares.
After the purse is loaded with money, at an ATM or through the use of an inexpensive special telephone, it can be used to pay for say, candy in a vending machine equipped with a card reader. The vending machine has to verify the authenticity of the card and check if enough money is available for a chocolate bar. Then the value of the purchase is deducted from the banker on the card and added to an e-cash box in the vending machine. The remaining balance on the card is displayed by the vending machine or can be checked at an ATM or with a balance-reading device. Electronic purses would virtually eliminate fumbling for change or small bills in a busy store or rush-hour toll booth, waiting for a credit card purchase to be approved. This allows customers to pay for rides and calls with a prepaid card that "remembers" each transaction. And when the balance on an electronic purse is depleted, the purse can be recharged with more money. As for the vendor, the receipts can be collected periodically in person—or, more likely, by telephone and transferred to a bank account.
While the technology has been available for a decade, the cards have been relatively expensive, from $5 to $10. Today the cards cost $1, and special telephones that consumers could install at home to recharge the cards are projected to cost as little as $50. A simple card reader would cost a merchant less than $200.
Advantages
For banks, the advantage is reduction in handling of cash and checks which
have to be transported securely and are labor intensive to handle. Electronic purses
are also seen as means to protect the bank and the card holder relationship which is perceived to be important in today’s’ competitive world
For the retailer, the advantage is the reduction in handling of currency and check. This
includes reducing the delay in money being credited to the retailer’s account.
Another advantage is the reduction in the risk of theft
Disadvantages
Real problem arises if the purse operator goes bankrupt. This is because the card user has exchanged real money, whose value is guaranteed by the state within certain limits, for electronic money in a smart card. If the purse operator goes bankrupt, the electronic money can suddenly become worthless, and the user will have lost his or her money
Another significant drawback for the user is what the card holder can do if the purse no longer works. If the purse is anonymous, then not even the purse system operator can determine the amount of money that was loaded into the purse
