CHAPTER ONE

INTRODUCTION

The act of exchanging goods and services is an old and enduring venture. The fact that man cannot satisfy his own needs all by himself has necessitated the need to trade. Trading has evolved from its primitive stages to a more advanced and sophisticated form. One of the primitive forms of trade is the trade by barter. The trade by barter preferred to some extent the necessary solution to the problem exchange; it however, has so many inadequacies attached. The problem of mutual coincidence of wants among others is a major setback to the development of the system. The advent of the paper cash system was a major breakthrough in the system exchange (trade) as paper cash possesses certain properties (homogeneity, portability malleability), is backed by the government and the central bank is a  legal tender for exchange. The paper cash system indeed contributed enormously to the ease with which trade is being carried out. The landmark achievement however in the areas of electronics, computers and information technology coupled with the need to carryout transactions at a very fast rate has paved the way for the digital cash transaction system.

The digital cash transaction system evolved after the paper cash. It involves the use of digital pin codes to represent paper cash with transactions carried out on this basis. More technically, digital cash transaction system is a payment or withdrawal message bearing a digital signature (pin code) and function are medium of exchange (trading). Essentially, digital cash mimics the functionality of paper cash. Paper currency and coins represent value because they are backed by a trusted third party, the government and the banking sector. Digital cash transaction system also represents value because it is backed by a third party usually a bank that is willing to convert digital cash to physical cash. To a degree, the digital cash transaction system operates in the following manner. A user opens an account in a bank and is being given the digital cash transaction card. He or she is also given his or her pin code for the card that is confidential to that person. That is the pin should not be known to another person. The owner of a card can deposit money into his or her account by going to the bank. The transaction can be used to withdraw money outside to the bank, buy things from shopping malls or merchant sites and can also check his/her account balance in any of these places.

1.2     STATEMENT OF THE PROBLEM

Money in all its various forms since its invention has always been faced with security problems. The digital cash transaction system though a cutting edge innovation as far as technology of money is concerned is not spared of this dilemma. Specific issues relating to the security of the system that needs to be addressed are;

a. The extent to which the problem of security may impede the growth of the digital cash transaction system.

b. The need to ensure adequate security in digital cash transaction system without unnecessary or excess expenditure on hardware.

c. The extent to which effective software design can tackle the problem of security in the digital transaction cash system.

1.3     PURPOSE OF STUDY

Since the enthronement of democratic process in Nigeria in 27th of May 1999, there has been huge foreign investment in the economy. The rate at which financial transaction are carried out has increased significantly. Without a medium of doubt, the prevalent use of paper cash is gradually giving way to a new system of payment, which is digital cash transaction system. An emerging generation of information technology (IT) survey, Nigerian are driving the for e-payment system which is becoming increasingly popular because of its convenience. Though, the growth trend is towards the offline digital cash (examples ATM, Master card, and Visa International) where cards (metal or plastic) are used for withdrawals on special machines made for the purpose. The online digital cash transaction system which involves the use of computers with connection lines is however on the increase as well. However, because of the increasing trend of corruption in the country, lack of adequate security has been a major setback in the growth of the digital cash transaction system. It could be deduced from the above that the performance of the digital cash system will be a major determinant of economic growth in Nigeria, given the present trend worldwide. The study is of particular importance in the Nigeria Economy where lack of adequate security has impaired the steady growth of digital cash in the economy. It seeks to explore possible software design features as a basis for securing the digital cash system against illicit operations.

1.4     OBJECTIVES OF STUDY

The purpose of which this project is undertaken is to critically examine the impact of good software design on the security of a typical digital cash transaction system. The study is therefore intended to achieve the following:

a. Incorporate an effective security design into digital cash transaction system to prevent all forms of excess spending of available money in owner’s account i.e. spending above what you have in your account or withdrawing what you have in your account.

b. Develop a database design that aids fast synchronization during verification of account which is necessary.

c. Evolve a design that totally ensures customers anonymity without compromising security in digital cash transaction system.

1.5   SCOPE OF THE STUDY

The scope of this project covers the online model of the digital cash transaction system. The online model of the digital cash transaction system incorporates the software, computer systems and connection or communication lines, machines. The design of software will be exploited to ensure adequate security in the digital cash transaction system.

1.6     LIMITATION OF THE STUDY

This study is limited to cities where commercialization takes place like Lagos, which is the commercial heartbeat of the country, and it is one of the dew cities in the country where digital cash transaction system can be in wide usage.

1.7     DEFINITION OF TERMS

The research topic embraces the use of several different terms. The use of terms however is made in the context of the following definitions.

Ø DIGITAL CASH TRANSACTION SYSTEM It is a message bearing a digital signature (pin codes), which performs as a medium of exchange or store of value.    

Ø SYSTEM It consists of the aggregate of units or parts functioning in a particular order to achieve specific objective (s).

Ø SECURITY It is the totality of all procedures, guidelines, routines and so on, put in place to check illicit access to operations in an installation.

Ø SOFTWARE They are set of instruction or codes that control the hardware. It can also be defined as virtual engine that drive the hardware.

Ø DESIGN It is the systematic approach or a deliberately planned arrangement of procedures to achieve an aim.