The Significant Role of Payment Technologies - Case Study Example

Dissertation Proposal Aims and Objectives Since few decades, a rapid advancement has been observed in the field of information technology, particularly, in developed part of the globe that has benefited millions of people around the world. In specific, one of the major sectors of information technology has been working on the security and safety of its stakeholders, as well as, their resources. Even after enormous developments of e-commerce applications and software for effective and efficient security payment systems, a number of businesses are still confronting issues related to payment processes, as well as, security breaches in such systems. Every year, annual reports identify an increment in fraud related activities despite of growth in such applications, and thus, it has now become very imperative to acquire effective solutions related to identified drawbacks and shortcomings in these payment systems. In this regard, the proposed dissertation will identify and discuss different technologies that are playing a significant role in minimizing fraud related activities, as well as, improving the security of payment processes and applications. Moreover, the researcher will endeavor to acquire information related to identified benefits, as well as, drawbacks of such technologies, which will allow the study to take a stand in the end. Different issues related to payment security-related technologies will be discussed that will provide an insight into the contemporary, as well as, future developments in this sector. Some of the major payment processing technologies used by previous and current banking systems are handwritten signatures, facial recognition, credit card, fingerprint, chip and pin smart cards, iris recognition, voice recognition, vein detection, and a number of biometric technologies that will change the perspective of security systems in the future. However, the dissertation will focus on chip and pin cards and iris recognition in detail, along with some details on other technologies as well. The reason of choosing these two technologies in detail is that one of them has been successfully implemented in most of banking systems around the globe, which will allow the research to critically analyze different issues related to this technology. On the other hand, iris recognition is an innovative and expensive biometrics technology that was only a part of sci-fi movies a few decades ago. However, advancement in biometrics technology has resulted in its accessibility to real world as well. In this regard, study of these two technologies along with other mentioned technologies will be very helpful in understanding different aspects of payment security sector in this era of information technology. Project Plan It is very important that a research should complete dissertation with great care. In this regard, timeframe is very significant, as a quick completion of dissertation may result in ineffective and inaccurate thesis, which may not be a contributing factor in academia. In this regard, one should plan the project in detail before its commencement, which may allow the researcher to act in an organized and efficient manner. As mentioned in the proposal that both primary, as well as, secondary research will be carried out by the researcher, a minimum period of three to four months is required to carry out mentioned research methodologies and gather requisite data and information. This period may include detailed analysis of the information, which is necessary for presenting a critically written thesis. During this period, researcher will appreciate suggestions and advices from instructor, in order to make it a beneficial and valuable item in the academic world. Methodology It is very significant for a study to reflect on previously carried out researches, as well as, perform primary research methodologies, in order to recognize and evaluate possible gaps and findings related to the topic. In this regard, brief and succinct surveys will be an important part of the methodology, as it will authenticate the validity of results and will be specific according to the abovementioned selected research topic. Organization culture is an important issue that plays a crucial role in the success or failure of any technology, and thus, such brief surveys will allow the research to take a stand on valid grounds. In this regard, information will be gathered by conducting a survey consisting of six to eight questions. In addition, the survey will allow the study to acquire practical answers of queries, such as reasons of success or failure of a technology, and strengths or drawbacks of a payment system. In this regard, fifty individuals from the IT industry will be selected for acquiring required information related to different payment processing technologies. Subsequently, interviews are another important component of primary research method, which involves generation of different questions from selected participants according to the selected topic. Unlike secondary research method, information is gathered hand-to-hand and directly by the researcher in primary research method. (Trochim, pp. 23-29, 2001) In other words, the dissertation will acquire groundwork from results of surveys/questionnaires and interviews of some of the IT businesspersons, if possible, in a brief manner while carrying out secondary research comprehensively. Simultaneously, secondary research involves archival and desk research of journals and books that will be very vital for identifying and formulating required materials for primary research during the dissertation. Once again, secondary research will permit the researcher to take a stand while carrying out primary research. Some of the questions based on the selected topic will be effectiveness and usefulness of technology in payment security, as well as, its impact on the payment security systems, etc. Eventually, dissertation will endeavor to identify and capture alterations in processes related to payments in e-commerce, as well as, face-to-face businesses, specifically in the United Kingdom. Lastly, a case study will be a part of the methodology, which will provide better and detailed understanding of reviewed literature and acquired results from primary research by considering consequences and impact of the selected technology on ground reality in one of the security system business of the United Kingdom. Different employees of the case study will be surveyed through questionnaires that will be carried out in a particular portion of the population, and various variables, such as, gender, location, department, age, etc of the department and positions will be gathered by the researcher. Every research methodology has its benefits, as well as, drawbacks. In terms of advantages, data can be easily collected in secondary research that does not necessitate intense hard work required during primary research, as information is gathered, rather than produced or generated. In this regard, time is one of the most important factors that persuade studies to select secondary research method. It is the case with this dissertation as well, as it will save time, money, and lot of efforts during the research period. (Bernard, pp. 54-61, 2005) In other words, time is saved that is required for performing a number of surveys and interviews from various people. Secondly, secondary research method is considered as one of the economical methodologies that can be carried out by researcher. Primary research method requires work force as discussed earlier in the proposal. Therefore, funding is another issue that becomes a major problem during the primary research. On the other hand, anybody or everybody can access available information from different sources, such as journals, books, websites, etc during secondary research method. (Trochim, pp. 30-36, 2001) Thus, this is another reason that researcher will focus more on methodological processes of secondary research. Data Collection and Analysis Besides methodological approaches, it is very significant that legitimate resources should be selected during the study, as it is probable that invalid sources may result in unproductive research regardless of effective methodological approaches. In this regard, a number of printed sources are available for almost every company to gather required and previously collected data from them, which will help the researcher in obtaining information and data for understanding the effects of technology on the security of payment systems. Evaluation is another essential notion that should not be ignored in any type of research approach. (Bernard, pp. 49-59, 2005) In this regard, the study will endeavor to authenticate all the sources used during the dissertation, as it will be beneficial for researcher, as well as, future studies that will be carried out based on this dissertation. Once again, books will support and advocate the process of evaluation and validation during the research. Moreover, researcher will try its best to acquire information and resources from recent books, as advancement of information technology has resulted in disposition of a number of theories and concepts related to business, sociology, science, etc. Furthermore, evaluation will provide an ethical perspective to the dissertation that is very essential to acquire principled results. In addition, quantitative research methodology will be used during the dissertation for data analysis, as it will help researcher in acquiring concrete results and justifications whether new technology is improving payment security and minimizing fraud, or not. Research previously carried out on the selected subject will be overviewed by researcher and necessary points will be taken., as the summarization of previously-done research will be necessary, in order to acquire the quantitative data. Literature Review Chip & PIN In specific, government of the United Kingdom has initiated an effort for improving the security of payments by the implementation of EMV standard that is known as ‘Chip and PIN’ technology. (Mayes, pp. 30-42, 2007) Until the abovementioned initiative was introduced, a magnetic stripe and signature were usually required for verification of transactions at point of sales in which, waiter or shopkeeper used to verify signature from the back of card or from national identity card, which often resulted in a troublesome process. On the other hand, Chip and PIN technology does not require a magnetic stripe, but it has provided a magnetic reader that is used by sellers to swipe the card, which is followed by a four-digit pin, only known to the customer. (Mayes, pp. 33-39, 2007) Such a process has eliminated a number of security issues confronted in previous technology; however, current studies have resulted in criticism on this technology as well. A major reason of sheer criticism on Chip and PIN technology has been due to the availability of this technology in black market as well, which has resulted in its usage for reading, as well as, writing the magnetic readers to make clone cards without consent of the customers. One of the benefits of Chip and Pin is that PIN pads are wireless and can be brought down to customer, which was not possible in previous systems that require handing over of card to sellers for the payment that involves a number of risks. (Mayes, pp. 59-67, 2007) According to experts, first patent of chip cards was observed in the year 1974, and since then, different advancements have been introduced in this technology. Although fraud related activities were decreased after the introduction of chip cards; however, vulnerabilities have been introduced by experts that require urgent consideration, in order to avoid any losses of millions of consumers around the globe. In order to understand the process of EMV standard of this Chip and PIN technology, it is necessary to understand SDA and DDA; Static Data Authentication and Dynamic Data Authentication respectively. In Chip and PIN technology, a four-digit secret code is stored in card by the customer, which is known as cryptographic check value in SDA. In addition, symmetrical algorithm is used in this CCV, which means requirement of same code every time to verify the check value. One of the major benefits of Chip and PIN is that only the card owner knows the code; however, the previous systems confronted issues of forged signatures. At the same time, the ‘Chip and PIN’ technology is endeavoring to tackle the issue of counterfeit chip cards that has caused criticism on it. As for DDA, a digital signature is created by the card that is verified by a public key in the terminal. In this regard, authencity of card can be verified offline without any need to go online. (Mayes, pp. 119-134, 2007) However, such flexibility has resulted in the creation of counterfeit chip cards in the black market. EMV cards are available on the internet, and according to experts, if anyone has access to account information of a genuine card, and access to that card, an SDA card can be created that can make transactions through the offline terminal. In this case, PIN plays no role, as pin-code in fake cards can be selected as per own ease. Another major problem identified during literature review is that if drawback of magnetstripe is resolved through its elimination, then a cross-cultural problem awaits the commencement of disapproval. It can be explained through an example that if only chip cards will be allowed in UK ATMs and point of sales, then foreigners will not be able to access ATMs in the United Kingdom, and vice versa. (Crispo, pp. 88-93, 2004) It is observed that a number of countries have introduced and implemented Chip and PIN technology, such as France, Germany, Ireland, Greece, etc; however, payment-processing companies in all these countries are confronting issues with this technology, and this is the point where biometric technologies were introduced in the market, which will be discussed in following section of the literature review. Biometric Technology In general, physiological characteristics are basis of biometric systems that consider them to authenticate and recognize a living person for its different processes. Some of the common physiological characteristics that have been so far used by the biometric technologies are fingerprint, handwriting, behavioral aspects, iris patterns, facial thermograms, typing habits, vein maps, DNA patterns, etc. Specifically, biometric technology has been categorized into two types; physiological and behavioral biometrics. Facial characteristics, eyes, hands, and fingerprints are some of the physical features of a human being that are considered in physiological biometric technology. On the other hand, voice recognition, signature and typing patterns, etc. are considered as behavioral characteristics, and thus, behavioral biometric technology. (Vacca, pp. 49-75, 2007) Until few decades ago, only high-security organizations and forensic organizations had the access to biometric technology, and it was just limited to sci-fi movie screens for general population. However, as information technology sector improved, new and innovative technologies were introduced and implemented in the market, particularly, security and payment related markets, such as banking sector. In the year 2004, revenues of more than forty-four million UK Pounds were generated by payment processing companies that were based on biometric technologies. According to IT experts, this amount will reach approximately 360 million UK Pounds by the year 2010, which shows the impact on the payment industry. (Vacca, pp. 60-64, 2007) One of the major factors of its success is elimination of requisites, such as cash, credit cards, checks, etc. that can be stolen away through different means. On the other hand, as in the case of fingerprint, a consumer will be required to get his/her fingers scanned that end the transaction. Similarly, eyes are scanned that copies the iris patterns and verifies customers on the spot. In some of high-security areas and organizations, a pin code is required as well with one of the biometric technologies that increase the level of security during the processing of any payment. In biometric technologies, a mathematical formula is generated after the scanning of fingerprint or iris scanning that avoids any risks of stealing of images from the server. In this regard, biometric technologies have a number of benefits; however, it is observed that still a number of banking organizations have not implemented such systems for their consumers, and price tag is one of the reasons for such decision. Reports have indicated that biometric technologies are five to ten times higher in terms of cost; however, huge losses from fraud and thefts are pressurizing banking companies to install biometric payment processing systems in their ATMs and other points of sales. Eye-Scanning Technology Another breakthrough in the sector of information technology is eye-scanning technology that scans human eyes, in order to recognize iris patterns that are considered unique in every human being. In specific, images are taken with the help of high-resolution camera that verify and authenticate iris patterns of customers. (Haddad, pp. 94-114, 2005) Unlike retina scanning, camera technology is used in iris recognition along with slight usage of infrared lighting that allows the application to acquire rich images of iris structures and patterns. As earlier mentioned in the review, mathematical formulas are generated from the digital images that provide unmistakable results of the customer. One of the major advantages of iris recognition technology is that contact lenses or glasses do not hinder the process of eye scanning. Studies have noted that a cut finger may result in damages to the fingerprint, and so, to the scanner. However, unlike fingerprint technology, the smallest outlier group has been used in this technology, which provides constancy, and at the same time, flexibility to recognize an individual in an environment of many others. (Vacca, pp. 35-44, 2007) Moreover, tests have specified that barring trauma in iris of a human eye lasts a lifetime, and thus, it increases the permanence and durability of the results. In specific, John G. Daugman from the University of Cambridge is credited for the creation and establishment of such an innovative and beneficial breakthrough in the human history. When compared to the accuracy of a fingerprint, iris recognition technology provides many times accurate results, as a huge amount of unpredictable patterns are contained in iris patterns that increase its uniqueness from others. It is observed by the experts that iris patterns are not affected by genetic influence, thus, known as phenotypic patterns. (Skinner, pp. 70-74, 2007) In the result, even two identical twins would have different iris patterns, which is one of the most imperative advantages of eye-scanning technology that is playing a major role in some of the banking organizations around the globe. Although its price tag has still limited it to forensic and top banking organizations, it seems that few years will spread it in the commercial banking sector of the developed world, and so, the developing world in a decade or so. (Skinner, pp. 78-86, 2007) One of the recent developments in advancement of payment systems is the creation of ‘Walkthrough Iris Identification System’ by Matsushita Electric Industrial Company Limited, which is an innovation and will improve the process of payments in coming years. One of the major breakthroughs in this creation is that iris patterns of even a walking person can be taken by this system, which will abolish the requirement of even standstill scanning of eyes. In specific, iris of a human eye is monitored through a two-megapixel camera in the abovementioned new system; however, the innovative technology in this newly built system is known as ‘eye position sensing technology’ that is the basis of this system. Values are stored in customers’ database that is compared with the acquired values of standing or walking customer, and payments are processed while the customer walks through the identification system. (Vochin, 2007). Time is often considered as money, and this new technology has put enormous efforts on time, as it takes only two seconds and even less than two seconds to complete the transaction or payment process, as only eyes are scanned by the system, rather than scanning of whole face in previous systems. Studies have noted that this system has proved to be very effective and efficient during its tests; however, it still requires some work to be done before it will be used in mass markets, banking sectors, ATMs, etc. (Skinner, pp. 33-34, 2007) Besides the innovative high-technology iris identification system, usually a 256-byte iris code is created from an image of iris that is acquired from a single processing technique known as Gabor filters. In this technique, pupil and outer part of the iris is considered for the creation of various concentric rings by the involvement of a circular wavelet transform. (McNally, pp. 103-119, 2008) Unlike fingerprint scanning in which, minutiae is oriented, as well as, classified with the help of fingerprint scanners, a simpler process is carried out in the iris recognition technology that has improved the process of payment security in a number of developed countries of the globe. According to the UK Department of Energy, lowest rates of errors were shown during the creation and verification of iris coding, which has led to its approval and success in the payment and security industry. (Skinner, pp. 45-60, 2007) One of the significant benefits of iris recognition technology is that one error in a million cases is expected in this technology practically, whereas, theoretical calculations show one in a trillion cases, which is a noteworthy contribution to the information technology. (Coats, pp. 20-25, 2007) Although it has many benefits; however, deployment of such a beneficial technology has confronted various issues. Firstly, it is very expensive to install such scanners on every ATM and stores in the country, which has led to its minimal usage. Secondly, disturbing images hinder the process of verification and authentication due to very small size of iris in human eye, and thus, it is very imperative that a high-resolution camera should be installed with the scanner, which is once again, a problem of price and affordability. (Coats, pp. 29-37, 2007) Different studies tested the quality of images from different cameras, and it was observed that a distance of two feet is not a problem for the high-quality cameras; however, an ordinary camera will require cooperation from the customer by standing within its few inches. It is noted that ATMs and payment rooms may easily acquire such cooperation from the customer; however, retail markets, grocery stores, and other related places may not be able to handle consumers in an effective manner. Another drawback of iris codes is that iris recognition technology allows rapid comparison between different iris codes, and thus, an iris code may link with different companies or banking organizations, which may result in losses. (McNally, pp. 123-142, 2008) Another confrontation from such technology is that iris patterns can easily be printed on contact lenses, and thus, if a hacker has access to an individual’s iris pattern, he/she can easily print them and make fraud transactions. (Haddad, pp. 68-75, 2005) However, despite few shortcomings of iris recognition technology, it has proved to be a strong candidate to improve the security of payment processes that has become one of the most imperative issues in times of economic recession and organized crimes. Now the literature review will discuss some of the other biometric technologies that have, that are, and that will play a crucial and significant role in influencing the payment processes in different parts of the globe. Fingerprint Literature review has already discussed some of the aspects of fingerprint technology in previous sections, and thus, it will now be explained briefly. According to studies, more than 75% of total sales based on biometrics were using fingerprint recognition technology by the year 1998. (Leebaert, pp. 90-99, 1999) Such a percent shows success of fingerprint technology, and thus, it has played an important role in improving the standards of payment security. However, cases like finger cuts, false submission of fingerprints, etc have resulted in development of some other technologies that will be discussed later in the review. Voice Recognition An innovative advancement in methods of authentication and verification is voice recognition technology that is being used in some of the banking organizations, and is often used for payment purposes as well. Some of the problems of this technology are classification of customer’s voice from rest of the environment, avoidance of speech eccentricities, etc. (Haddad, pp. 39-43, 2005). Nowadays, voice recognition is usually used to verify and authenticate a banking consumer in telephone banking systems, as telephone banking involves claims for withdrawal or payments, and thus, voice recognition allows banking sector to authenticate users in an effective manner. Vein Scanner Unlike classical security-related technologies, the human body is itself the username, as well as, the password in this form of technology that has not been employed in payment process; however, it will play a significant role in future banking processes, and thus, it will be a contributing factor in the literature review. A person’s finger consists of different veins that are patterned differently and uniquely in every human being. In Japan, Hitachi firm with collaboration of JCB is endeavoring to create technology that may scan person’s finger to identify veins on them. In this regard, even a cut or bruised finger will not be a problem in such technology, and thus, it will be a fraud-proof security system for processing of different banking activities, such as deposit, withdrawal, payments, etc. As more and more fraudsters are looting banking companies every year, more of these companies are awaiting the development and advancement of better technology that may allow foolproof identification of their account holders and consumers. According to the claims and reports by Hitachi, only a finger is required to place or even hold in front of the veins scanner that would be able to scan an image of vein patterns without even touching the finger. (Vacca, pp. 237-256, 2007) Creation of such technology will be a new breakthrough in authenticating information related to consumers; however, such development should be prepared to confront criticism and drawbacks like previously developed ones. Future Technologies Proposals of various biometric technologies have been provided by IT companies, as more and more companies are now looking for efficient and effective means for handling payment processes. In this regard, some of the technologies that will be a part of payment security systems are facial thermograms, ear and lip recognition. (Vacca, pp. 310-322, 2007) It is hoped that if the current rapidness of technology advancement continued, future-banking systems will identify and authenticate their users through their body scents. Lastly, it is not necessary that every technology may got accepted from the contemporary society, as credit cards confronted the same problem of acceptance in 1960s, as people are always hesitant to try and implement new things while putting away their conventional practices. Although banking companies and payment processing organizations always await development of new technology, it is very imperative that privacy issues should not be avoided by the IT companies, as its avoidance may result in contrary results. Conclusion Payment security has been improved effectively by the development and advancement of various technologies. While the research will provide an insight into different perspectives of technological impact on security of payments, it will not do anything to reduce such impact or effect on millions of consumers around the globe. However, it is hoped that the concerned organizations and authorities will considered the identified risks, in order to protect system from them. Along with identification of problems, the study will endeavor to provide possible solutions that can be implemented to reduce or even eliminate shortcomings of technologies. In brief, technological involvement has now become a necessity for security of payment processes in contemporary globe. Until now, this proposal has discussed some of the aims and objectives identified for the dissertation, followed by project plan that specified tentative period that will be considered for the completion of dissertation. Methodology part conversed about different methodological approaches that will be preferred for acquiring required information. In the end, literature review provided an insight into the technological world that is playing a major and crucial in lives of millions of people that are linked with banking companies or payment processing organizations around the globe. This dissertation will carry out abovementioned and discussed methodologies and strategies to acquire factual and logical results, which will be beneficial for students, teachers, and professionals in better understanding of the topic. References Coats, William Sloan. (2007). The Practitioner’s Guide to Biometrics. American Bar Association. Crispo, Bruno. (2004). Security Protocols. Springer. Haddad, Aneace. (2005). A New Way to Pay. Gower Publishing Limited. Leebaert, Derek. (1999). the Future of the Electronic Marketplace. MIT Press. Mayes, Keith E. (2007). Smart Cards, Tokens, Security, and Applications. Springer. McNally, Megan M. (2008). Perspectives on Identity Theft. Criminal Justice Press. Skinner, Chris. (2007). the Future of Banking in a Globalized World. John Wiley and Sons. Trochim, William M. K. (2001). Research Methods Knowledge Base. Atomic Dog Publications. Vacca, John R. (2007). Biometric Technologies and Verification Systems. Butterworth-Heinemann. Vochin, Alex. (2007). “Panasonic Develops "Eye-Poking" Walkthrough Iris Identification System.” Softpedia. Retrieved on May 07, 2009: http://news.softpedia.com/news/Panasonic-Develops-Eye-Poking-Walkthrough-Iris-Identification-System-62640.shtml Word Count: 4588 Words (exclusive Cover Page & Reference List) References to be Used Babbie, E. (2000). The practice of social research, Wadsworth. Bernard, Harvey Russell. (2005). Research Methods in Anthropology. Rowman Altamira. Blaxter, C.H. & Tight, M., (1996, 2003). How to Research, Open University Press. Bloor, M et al., (2000). Focus groups in social research. Sage. Bryman, A., (2001). Social Research Methods. Oxford. Burton, D. (2000). Research Training for Social Scientists. Sage. Fielding, J. & Gilbert, N., (2000). Understanding Social Statistics. Sage. Lee, R, (2000). Unobtrusive methods in social research. Open University. Robson, C., (2001). Real World Research, 2nd edition. Blackwell. Read More