The Future of Money: Electronic Payment Modes and Security.

Abstract:

"Money in the 21st century will surely prove to be as different from the money of the current century as our money is from that of the previous century. Just as fiat money replaced specie-backed paper currencies, electronically initiated debits and credits will become the dominant payment modes, creating the potential for private money to compete with government-issued currencies." Just as every thing is getting under the shadow of “e” today we have paper currency being replaced by electronic money or e-cash.

Hardly a day goes by without some mention in the financial press of new developments in "electronic money". In the emerging field of electronic commerce, novel buzzwords like smart cards, online banking, digital cash, and electronic checks are being used to discuss money. But how are these brand-new forms of payment secure?

And most importantly, which of these emerging secure electronic money technologies will survive into the next century? These are some of the tough questions to answer but here’s a solution, which provides a form of security to these modes of currency exchange using the “Biometrics Technology”.

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The Money Pad introduced here uses the biometrics technology for Finger Print recognition. Money Pad is a form of credit card or smartcard, which we name so. Every time the user wants to access the Money Pad he has to make an impression of his fingers which will be scanned and matched with the one in the hard disk of data base server. If the finger print matches with the user’s he will be allowed to access and use the Pad other wise the Money Pad is not accessible.

Thus providing a form of security to the ever-lasting transaction currency of the future “e-cash”.

Keywords:

1. Money Pad - A form of credit card or smart card similar to floppy disk, which is introduced to provide, secure e-cash transactions.

2. Digital or Electronic Cash or Digi-cash or E-cash or Ecash or Digital Money –

These terms are also used interchangeably, and they refer to any of the various methods that allow a person to purchase goods or services by transmitting a number from one computer to another. The numbers are issued by a bank and represent sums of real money. Digital cash is anonymous and reusable.

3. Personal Digital Assistance - A PDA, sometimes referred to as a palm-top computer, is smaller than a laptop computer and does not have as much computing power. Used to send email via a wireless modem, write documents in a text editor, perform calculations in a spreadsheet, store names and addresses, and perform other common business and personal tasks.

4. Biometrics Technology - Technology used to accurately identify and verify an individual’s identity.
5. Finger Print Reader – A machine with read/write head capable of reading the information stored in the Money Pad.
6. Float – The transaction in terms of digi-cash, which takes zero-sum gain, is called float.
7. Fiat Money – Authorized money.
8. Specie-Backed – Coined money.
9. Legitimate – Law full.

Introduction:

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. Maybe, or may not be, but one trend is already clear. The wallet of the future will hold less paper cash, coins and magnetic stripe cards. It will hold instead Money Pad containing digital cash and other financial information, updated — perhaps automatically — by a PDA with a satellite communication link.

As the new technologies develop into 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. Keeping this point of view in mind the Biometrics Technology is use to develop an e-cash handling system, which is similar to well known credit cards and smartcards. The e-cash handling system is a device that facilitates secure currency transactions. We call it as Money Pad which recognises Finger Print’s of the user and decides weather the user is a authorised person or not. Every time the user wants to access the 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 other wise the Money Pad is not accessible.

Technical Details Of The Paper

• Basic Of The Present System:

Presently due to the usage of computers in almost all the fields the demand for the utilization of Electronic Money have been increased. Payments made today in nearly all of the deposit currencies in the world's banking systems are handled electronically through a series of interbank computer networks. Credit cards and smartcards 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.

• 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 secret password etc. Later the user is allowed to perform the transaction. These credit cards have several disadvantages like, Disadvantages:

r Instant clearing of funds is not possible.
r User is always under the pressure of limits on purchase defined by the issuer of the card and also every transaction involves certain charges.
r Insecure transactions using fixed encryption.
r The card has to be renewed once it is expired.

• 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:
r Insecure transactions using fixed encryption.
r Risk of data loss due to chip failure.

• New Approach

As this is an era of internet every thing is getting online like shopping, business, banking etc. In the recent trend even money is available online at any time in the form of digi-cash or cybercash etc. These are the recent medium of exchange, which are necessary for the existence of e-banking. As in future the world is going to be paper less cash the existence of e-cash will lead e-banking. In future internet is going to capture the whole world and the private currency will become the media of exchange in e-banks replacing the government currency. Keeping this point of view in mind and to over come the above drawbacks of credit cards and smart cards here we present a medium of exchange to carry digital cash wherever man wants, which we name as “Money Pad”.

Money Pad:

Money pad is one such medium of exchange, which aims to provide secure means of currency exchange. It’s a means that carries digital cash, as paper cash is going to extinct. “In order to use this money pad it is necessary to have at least one e-bank in every city”.

Money pad is a biometric system similar to a credit card or a smart card just like a floppy disk. It consists of a touch sensor and magnetic disk as its peripherals (Fig-1 page -8). Touch sensor is used to record the fingerprint of the user. Magnetic disk, which has the read and write permission is used to hold the authentication details of the user, bank code as well as digi-cash. The bank code and account number of the owner of this money pad is present on the label.

Fig-1 A Money Pad
Operation of Money Pad:

• New User: (Refer fig-2 page 10)

When a user wishes to have a Money Pad, he is supposed to visit a near by bank which has a e-bank facility. It is necessary for the new user to create a account with some minimum balance. The authentication details along with his fingerprint is recorded and stored in the data base server. The user is provided with a account number and bank code along with his Money Pad. The Money Pad consists of stored information like account number, bank code (from where he has purchased this money pad) and his fingerprint.

• Transaction using Money Pad: (Refer fig-3 page 10)

Whenever a user wants to use the Money Pad he has to place his finger on the touch sensor and then place it in a finger print reader. The reader will ask for bank code so that he can enter into his e-bank, then his account number so that he can enter into his account. After this the reader will access the fingerprint and matches with that present on the Money Pad as well as present in the data base server. If a match occurs the reader knows that he is a authorised user and allows for further transactions. If not then the reader comes to know that the user is unauthorised and a provision can be made so that the digicash present in the Money Pad is e-mailed back to the authorised account holder using the user details present in the Money Pad. As the Money Pad has read and write facility it is used to down load digi-cash, carry on transaction and store the balance.

Write Protect

Nob
Touch Sensor
Outer cover
Space For
Read/Write
Magnetic Disk
Central Hub

Why use Money pad?

• Instant clearing of funds

The instant clearing of funds means the end of 'float', which is the time spent waiting for a fund transfer to clear. Payments can be instantly made as man himself carries digi-cash with him. There is no need for any intermediate party to clear the funds.

• Avoids the insecure way of carrying money

The present trend is full of theft and robbery. Man is in fear while he is carrying a huge amount from place to place. The medium of exchange that is introduced (Money Pad) eliminates this fear since man need not carry any hard cash as it is stored in the form of digital money. In case he loses the Money Pad the provision can be made such that the lost cash can be recurred into his own account by e-mail facility.

• Provides strong security

As we know every body has a different fingerprint it is a rare case to have two persons with same fingerprint. Taking this into consideration Money Pad uses Biometric Technology to provide strong security.