While the Spot Card offered several benefits, the use of the related information technology to process snack and souvenir transactions did create new risks. Identify risks for the following groups:

Question

What will be an ideal response?

Answer 1

? Snack and souvenir vendors
? Fans in the stadium
? First Union Bank
At the time of implementation, the use of the Spot Card did present unique risks to vendors, customers,
and the bank.
Snack and Souvenir Vendor Risks
The POS machines were used to capture all sales transaction information for all vendors. The vendors
were totally reliant on the operating ability of the POS machines. Downtime associated with any
equipment failures may have resulted in lost sales, which would be costly. Failure to maintain equipment,
including battery backups, increased the risk of POS failure.
During the processing of sales transactions, there were several potential risks. The vendors
were totally reliant on the POS machines to capture and process transaction information accurately
and completely. Vendors were likely to be concerned about whether the POS machines correctly read
and updated each customer’s Spot Card balance. In addition, the vendors were relying on the POS
machine to correctly record the number of units sold by product type, retrieve the appropriate unit
price and calculate the correct sales amount based on quantity sold. Vendors assumed some risk that the
card number, location code, and date and time of transaction were incorrectly captured. Any errors in
the design of those functions would have resulted in greater potential for systematic errors across all
sales transactions.
Once a sales transaction was complete, the POS machines maintained all data related to previous
sales until the information was later downloaded to the stadium and First Union computers. Vendors
relied on the capabilities of the POS machines to correctly accumulate multiple sales transactions that
occurred until the POS machine information was downloaded to the stadium computers. There was
some risk that the process involving the summation of individual transactions is incorrect.
Once a day was complete, POS machine data was downloaded to the stadium computer.
Vendors faced the risk that the downloading of the POS machine data to the computer in the stadium
counting room was not accurate and complete. The actual downloading process may have accidentally
deleted transactions or captured the same transaction in duplicate, if not properly controlled. A similar
risk of data loss or duplication rested with the transmission of data to the First Union host computer.
The transmission of data may have resulted in inappropriate transfer or loss of data, either through
equipment failure or sabotage.
At the time, First Union’s computer was responsible for processing all data downloaded from
the stadium computer for all vendors. There was increased risk that the summation of data across
vendors might have been inaccurate. There was some risk that certain data items might be lost or
inaccurately processed. For example, there may have been some risk that one particular vendor’s sales
were allocated to a different vendor. Finally, the vendors were reliant on the accuracy of the sales
reports generated by the First Union computer.
Risks for Fans in the Stadium
Customers relied on the accuracy of information captured on their Spot Card, which could have
been affected in several ways. First, customers relied on the accuracy of the ATM-like machines that
were used to increase the balance maintained on the Spot Card chip. The ATM machines could have
incorrectly updated the chip balance and/or incorrectly updated the fan’s bank balance or credit card
balance. Second, the customers relied on the accuracy of the POS machines to process each purchase
they make with a Spot Card. The customers bore some risk that the updating of the balance remaining
on the Spot Card was correctly processed. Third, the customers ran the risk of Spot Card failure
whereby the chip was damaged and could not be used to process any transaction. Fourth, like vendors,
the customer relied on the POS machine to accurately process the sale. The customer relied on the
POS machine’s ability to process the correct price times quantity for each sales transaction. Fifth, the
customer bore the risk of physical loss or theft of the Spot Card. Finally, the customer lost cash when
the balance was unused after two years.
First Union Risks
Overall, the reputation of First Union’s ability to install and maintain POS technologies was at risk. The
successful operation of the Spot Card system at Jacksonville would have impacted First Union’s ability
to sell this type of service to other businesses. Thus, the bank assumed reputational risk.
There was some risk the ATM-like machines inaccurately transferred balances from bank
accounts and credit cards to Spot Cards. The bank would have needed to be certain that those machines
only increased Spot Card balances for amounts transferred from existing bank and credit card balances.
Incorrect reading and processing of bank and credit card information could have increased the financial
risks of the bank. The bank also assumed some risk that counterfeit Spot Cards are created.
First Union was ultimately responsible for ensuring that the bank’s computer was operational
once data was downloaded from the stadium computer. The bank assumed some risks that the computer
correctly processed transactions for each vendor. The accuracy and completeness of information
processed by the First Union computer was dependent on the bank’s controls surrounding that system.