Implementation of an Additional Factor for Secure Authentication in Online Transactions

ABSTRACT To eradicate financial fraud, governments encourage the digitization of financial transactions, which is also reinforced by the digital economy paradigm. Recently, there has been an exponential increase in the number of e-transactions, and the incidence of cyber crimes related to online transaction fraud has also been increasing. To prevent online transaction fraud, the stakeholders of financial-transaction-related companies have implemented various secured authentication and authorization practices at all levels. In this paper, an additional factor for secure authentication for online transactions has been proposed. A third authentication factor, in addition to Personal Identification Number (PIN) and one time password (OTP), has been proposed, which is based on the global positioning system (GPS) location of the user who initiates the transaction. The strategy is to approve / decline the transaction based on a specified distance constraint between the transaction device and the user’s mobile device; this distance is used as an additional authentication factor (third factor) to verify the online transaction. The main objective of this study is to prevent fraudsters from performing online transactions from devices that do not belong to the user and are not currently in the possession of the user. The simulation results show that a high detection rate, i.e., 98.55%, is obtained using the proposed method.