20-763 ELECTRONIC PAYMENT SYSTEMSFALL 2002COPYRIGHT © 2002 MICHAEL I. SHAMOS Electronic Payment...

20-763 ELECTRONIC PAYMENT SYSTEMS

FALL 2002

COPYRIGHT © 2002 MICHAEL I. SHAMOS

Electronic Payment Systems20-763

Lecture 8

Smart and Stored-Value Cards


FALL 2002


Outline

• Smart card types• Operating systems• Wireless cards• Card manufacture and issuance• Security• Octopus• Mondex• Mobile systems


FALL 2002


ePayment by Smart Card

• Objective: replace cash• Cash is expensive to make and use

– Printing, replacement– Anti-counterfeiting measures– Transportation– Security

• Cash is inconvenient– not machine-readable– humans carry limited amount– risk of loss, theft

• Additional smart card benefits


FALL 2002


Smart Cards

• Magnetic stripe– 140 bytes, cost $0.20-0.75

• Memory cards– 1-4 KB memory, no processor, cost $1.00-2.50

• Optical memory cards– 4 megabytes read-only (CD-like), $7-12

• Microprocessor cards– Imbedded microprocessor

• (OLD) 8-bit processor,16 KB ROM, 512 bytes RAM

• Equivalent power to IBM XT PC• 32-bit processors now available


FALL 2002


Smart Card Costs

NEW: RW Optical 500 MB 32-bit $15 Reader: $200

SOURCE: SUN


FALL 2002


Laser Optical Memory Card

Capacity: 1MB - 1GB


FALL 2002


Microprocessor Card Adoption

SOURCE: DATAQUEST (10/2000)

0200400600800

1,0001,2001,4001,6001,8002,000

2000 2001 2002 2003 2004

Asia Pacific

Japan

Europe

Americas

North America

1999: 500 M microprocessor cards2004: 1750 M microprocessor cards

MILLIONSOF CARDS

WORLDWIDE


FALL 2002


Card Taxonomy

M ag ne ticS tripe

W ie ga nd B ar riumF e rr i te

M ag ne tic

R ad ioF req u en cy

M em ory O n ly W ith M ic roP roce ssor

W r ite O n ce(E P R O M )

M em ory O n ly W ith M ic roP roce ssor

W r ite M a ny(E E P R O M )

S m a rt M em o ry

IC C a rds

B a r C od esS o fts tr ip

O C R O p tica lM em o ry

O p tica l

M ach ine R e ad ab le C ards

SOURCE: BURGER, CAROLL & ASSOCIATES


FALL 2002


Multi-Application Smart Card

Digital CertificatesDigital Certificates

Private Key(s)Private Key(s)

ACE (Active CustomerACE (Active CustomerEnrollment) AuthenticationEnrollment) Authentication

Biometric DataBiometric Data

Employee DataEmployee Data

Magnetic Stripe orMagnetic Stripe orRF Door AccessRF Door Access

Employee PictureEmployee Picture

Encryption KeyEncryption Key

Password CachePassword Cache

S/Mime Secure MailS/Mime Secure Mail

SSL Secure WebSSL Secure Web

Customer PKICustomer PKIApplicationApplication

Single Sign-OnSingle Sign-On

Local File EncryptLocal File Encrypt

Secure Screen SaverSecure Screen Saver

BiometricBiometricAuthenticationAuthentication

Application LoginApplication Login

SOURCE: SECURITY DYNAMICS


FALL 2002


Smart Card Structure

Contacts (8)SOURCE: SMART CARD FORUM

Epoxy

Microprocessor

Contacts

Card(Upside-down)

Contacts:


FALL 2002


Old Smart Card Architecture

SOURCE: SMART CARD FORUM

EEPROM:ElectricallyErasableProgrammableRead-OnlyMemory


FALL 2002


Cyberflex™ Java Smart Card

• Complete 32-bit Java run-time environment on a card• Utilities for compiling and loading cardlets onto the

card from a PC

OPERATING SYSTEM

MICROPROCESSOR

JAVA VIRTUAL MACHINE

1 2 3

CARDLETS


FALL 2002


Smart Card Architecture

• File structure (ISO 7816-4)– Cyclic files

• Database management on a card– SCQL (Structured Card Query Language)– Provides standardized interface– No need to know file formatting details


FALL 2002


Contactless Cards

• Communicates by radio– Power supplied by reader

– Data rate 106 Kb/sec

– Read 2.5 ms, write 9 ms

– 8 Kb EEPROM, unlimited read, 100,000 writes

– Effective range: 10 cm, signals encrypted

– Lifetime: 2 years (data retention 10 years)

– Two-way authentication, nonces, secret keys

– Anticollision mechanism for multiple cards

– Unique card serial numberSOURCE: GEMPLUS


FALL 2002


How RFID Works• Tag enters RF field• RF signal powers tag• Tag transmits ID, plus data• Reader captures data• Reader sends data to computer• Computer determines action• Computer instructs reader• Reader transmits data to tag

RFIDReader

Antenna

Computer

Tag

SOURCE: PHILIPS


FALL 2002


SOURCE: SANJAY SARMA

RFID


FALL 2002


Low-Cost RFID

Antenna Manufacture

Antenna/IC Assembly

Conversion to Package

End users

IC Manufacture

20¢ 5¢ 5¢ 20¢

IC Design

Millionsof tags

Total~ 40¢

1-2¢ 1¢ 1¢ 1¢ Billionsof tags

Total~ 4 - 5¢

SOURCE: SANJAY SARMA


FALL 2002


Java Ring

• Java-enabled iButton

• Communicates by contact at 142 Kbps

• 64 KB ROM and 134 KB RAM

• Stores 30 digital certificates with 1024-bit keys

• Uses: authentication, epayment, access

• Cost: $15-30 in unit quantity

SOURCE: IBUTTON.COM


FALL 2002


OpenCard Framework (OCF)

SOURCE: OPENCARD.ORG

CardServiceLayer

CardTerminalLayer

(TALKS TO CARD)

(TALKS TO READER)


FALL 2002


Magnetic Stripe Protection

CARD PROTECTION TECHNOLOGIES

VISUAL PROTECTION

ACCESS PROTECTION

CONTENT VERIFICATION

Protection on Modification

Protection on Duplication

Holograms

Microprints

Ultraviolet Pattern

Photocard

Signature

DNA

PIN

PVV

Embossed Data

CVC

Smart Card

Memory Card P Card

Watermark Sandwich Magneprint Valugard

Xsec

Holomagnetic

Xshield

SOURCE: L. M. CHENG, CUHK

CVC = Card Verification CodePVV = PIN Verification Value


FALL 2002


ATM and Debit Card Cryptography

• PIN cannot be stored anywhere in plaintext• PIN cannot be reverse-engineered from the card or

any database• Generate a random 4-digit number (the PIN)• Combine PIN with other data (account number) to

form a data block• Encrypt the data block using 3DES and secret bank

keys• Select several digits from the encrypted data to use

as the Pin Verification Value (PVV)


FALL 2002


Forming the Pin Verification Value

4-DIGITPIN

ACCOUNTNUMBER

SECRETBANK KEYS 3DES ENCRYPTED

DATA BLOCK

CARD HASACCOUNT NUMBER

AND PVV

PIN VERIFICATIONVALUE (PVV)

SELECT 4-6 DIGITSFROM ENCRYPTED DATA

BLOCK TO FORM PVV


FALL 2002


Using the Card

CARD HASACCOUNT NUMBER

AND PVV

ATM MACHINE READS ACCOUNT NUMBER AND P V V

4-DIGITPIN

ACCOUNTNUMBER P V V

USER TYPES PIN

MACHINE NOW HAS:

SECRETBANK KEYS

3DES DECRYPTEDDATA BLOCK

MACHINE HAS BANKKEYS IN HARDWARE:

P V V

COMPUTE P V V

COMPARE CARD P V VWITH COMPUTED P V V

P V Vs MATCH? USER IS AUTHENTIC

P V Vs DIFFERENT? USER IS REJECTED


FALL 2002


Credit Card Fraud

Stealing — A legal card may be stolen and used in ATMs or EPOSs.

Altering and re-embossing a genuine card, modifying visual features.

Skimming or altering data on the magnetic stripe, e.g. expiration date or credit limit, stored value.

Copying data from a genuine card to another online — “white plastic fraud”

Counterfeiting — “color plastic fraud” — encoding information from one card to another card off-line

SOURCE: L. M. CHENG, CUHK


FALL 2002


OP Security Assumptions

• OP card is merely a component • Need to trust:

– back-office systems– cryptographic key management– card/chip operating environment (COE) – off-card security procedures (actors and roles)

• There are vulnerabilities the OP card cannot protect itself against

SOURCE: GAMMA


FALL 2002


OP Card Security Threats

Group 1 Group 2

Group 4

Group 5Group 6

Group 7

CAD

Clone

Future

Past

CurrentGroup 3

DIRECT ATTACKS ONCHIP CIRCUITRY

INDIRECT ATTACKSON CHIP CIRCUITRY

ATTACKS USING CARDSNOT YET ISSUED, OLD

CARDS, CLONES

ATTACKS ON CARD’SINTERFACE TO THE OUTSIDE,E.G. PREMATURE REMOVAL

ATTACKS ON THE RUN-TIMEENVIRONMENT THROUGH THE

CARD ACCEPTANCE DEVICE (CAD)

THREATS FROM CARD APPS ANDNEED TO SHARE RESOURCES

THREATS BASED ON RTEIMPLEMENTATION

SOURCE: GAMMA


FALL 2002


Smart Card Security

• Observers• Active defenses• Attacks:• Microprobing, microscopy• Differential fault analysis

– (Boneh et al. 1997)– Induce errors, observe output differences

• Differential power analysis

SOURCE: cryptography.com

SOURCE: Kömmerling et al.


FALL 2002


Differential Power Analysis

• Send different inputs to the Smart Card to learn details of its encryption key

• When a correct key value is tried, the algorithm responds• Incorrect keys have zero average response

SMART CARD POWER CONSUMPTIONDURING DES ENCRYPTION

SOURCE: cryptography.com

16 DES ROUNDSINITIAL

PERMUTATIONFINAL PERMUTATION

EXPANDED VIEWOF ROUNDS 2 & 3


FALL 2002


Smart Card Optical Vulnerabilities

SOURCE: ROSS ANDERSON

PIC16F84 “DEPACKAGED”

SRAM ARRAY, MAGNIFIED(STATIC RANDOM ACCESS MEMORY)

MANUAL PROBER WITHPHOTOFLASH LAMP


FALL 2002


Smart Card Sales Leaders (2000)

VENDOR # OF CARDS SHARE

Gemplus 185,000,000 29%

Schlumberger 152,000,000 24%

Oberthur Smart Cards 85,000,000 14%

Giesecke & Devrient 76,000,000 12%

Orga Card Systems 53,000,000 8%

TOTAL 628,000,000SOURCE: CARDWEB.COM


FALL 2002


Octopus• Transaction time < 300 milliseconds• Transaction fees: HK$0.02 + 0.75%

– $10 transaction costs $0.095 (0.95%)

• Applications– Transit– Telephones– Road tolls– Point-of-sale– Access control

• Anonymous / personalized• How does money get to service providers?

– Net settlement system operated by Creative Star


FALL 2002


Octopus

SOURCE: SONY

SONY RC-S833CONTACTLESS SMART CARD

I/O SPEED: 211 Kbps

SONY READER/WRITER


FALL 2002


Octopus System

SOURCE: WORLD BANK


FALL 2002


Bus Smart Card Systems

SOURCE: MITSUBISHI


FALL 2002



FALL 2002


Mondex

• Subsidiary of MasterCard• Smart-card-based, stored-value card (SVC)• NatWest (National Westminister Bank, UK) et al.• Secret chip-to-chip transfer protocol• Value is not in strings alone; must be on Mondex card• Loaded through ATM

– ATM does not know transfer protocol; connects with secure device at bank

• Spending at merchants having a Mondex value transfer terminal


FALL 2002


Mondex Overview

SOURCES: OKI, MONDEX USA


FALL 2002


Mondex Security

• Active and dormant security software– Security methods constantly changing– ITSEC E6 level (military)

• VTP (Value Transfer Protocol)– Globally unique card numbers– Globally unique transaction numbers– Challenge-response user identification– Digital signatures

• MULTOS operating system– firewalls on the chip


FALL 2002


Payment Cards

• 8-128 Kb• Data rate 115 Kb/sec

• ISO 7816 compliant • Visa-certified• PIN management and verification

• 3DES algorithm for authentication, secure messaging

• ePurse with payment command set (debit,credit, balance, floor limit management)

SOURCE: GEMPLUS

EMV =EUROPAY INT’L,MASTERCARD,VISA

MPCOS =MULTI PAYMENT CHIPOPERATING SYSTEM


FALL 2002


Mobile Card Systems

MOTOROLA P7389TRIBAND WAP PHONE

WITH SMARTCARD READER


FALL 2002


WAP or i-Mode

SE

T o

r S

SL

/TL

S

Mobile EMV Chip Debit/Credit

MerchantAcquirer

Clearing & Settlement

CardIssuer

s

Acquiring Payment Engine

Merchants

Gateway Wallet Server

Voice or IP Browsing & Offer Request

OPTION 1: Multi-app: SIM + EMV (CEC)

Option 2: Dual slot phone with full size EMV

Merchant Offer

Purchase Request

Authorisation Request / Response

Shipment Confirmation

M/CHIP transaction with ARQC and ARPC / ARC

data classed as “Card Present” Transaction

Wallet simply forwards cardholder’s address details

SOURCE: MAOSCO


FALL 2002


Comparison of Payment Methods

PAYMENT TYPE

ADVANTAGES DISADVANTAGES

Cash Anonymous, universal, free

Risk of theft/loss, bulky

Credit Card Almost universal High transaction cost, fraud/forgery

EFTPOS Direct access to cash Must be online, security only moderate

Disposable smart card

Fast, private Risk of loss, limited to small amounts

Personalized smart card

Long useful life, security, like eCash

Not anonymous, lack of international standards


FALL 2002


Major Ideas

• Potential of cards is unexplored; new uses every day• Powerful microprocessors allow

– cryptography– certificates, authentication– secure purses

• Wireless (contactless) cards enable new business models

• Huge capacity laser CD-DVD cards allow large databases of personalized information


FALL 2002


QA&

20-763 ELECTRONIC PAYMENT SYSTEMSFALL 2002COPYRIGHT © 2002 MICHAEL I. SHAMOS Electronic Payment...

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Transcript of 20-763 ELECTRONIC PAYMENT SYSTEMSFALL 2002COPYRIGHT © 2002 MICHAEL I. SHAMOS Electronic Payment...