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Electronic Payment Systems 20-763 Lecture 9 Smart and Stored-Value Cards

Electronic Payment Systems 20-763 Lecture 9 Smart and Stored-Value Cards. ePayment by Smart Card. Replace cash Cash is expensive to make and use Printing, replacement Anti-counterfeiting measures Transportation Security Cash is inconvenient not machine-readable

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Electronic Payment Systems 20-763 Lecture 9 Smart and Stored-Value Cards

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  1. Electronic Payment Systems20-763Lecture 9Smart and Stored-Value Cards

  2. ePayment by Smart Card • 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

  3. Memory Cards • Magnetic stripe • 140 bytes • Vanilla memory cards • 1-4 KB memory, no processor • Optical memory cards • 4 megabytes read-only (CD-like) • 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 • Intelligent, active devices with defenses

  4. Smart Card Costs NEW: RW Optical 500 MB 32-bit $15 Reader: $200

  5. Card Taxonomy SOURCE: BURGER, CAROLL & ASSOCIATES

  6. Micropayments SOURCE: SMARTCARDCENTRAL.COM

  7. Private Key(s) Digital Certificates Biometric Data Encryption Key Employee Data Password Cache Employee Picture Magnetic Stripe or RF Door Access Multi-Application Smart Card SSL Secure Web S/Mime Secure Mail Customer PKI Application ACE (Active Customer Enrollment) Authentication Single Sign-On Biometric Authentication Local File Encrypt Secure Screen Saver Application Login SOURCE: SECURITY DYNAMICS

  8. Microprocessor Contacts Card (Upside-down) Epoxy Smart Card Structure Contacts: Contacts (8) SOURCE: SMART CARD FORUM

  9. Old Smart Card Architecture EEPROM: Electrically Erasable Programmable Read-Only Memory SOURCE: SMART CARD FORUM

  10. CARDLETS 2 3 1 JAVA VIRTUAL MACHINE OPERATING SYSTEM MICROPROCESSOR 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

  11. 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

  12. OpenCard Framework (OCF) CardService Layer (TALKS TO CARD) CardTerminal Layer (TALKS TO READER) SOURCE: OPENCARD.ORG

  13. MULTOS Administration 14-COMPANY SMART CARD CONSORTIUM SOURCE: MULTOS

  14. Open Platform Card Specification SOURCE: GAMMA

  15. 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

  16. Group 5 Group 6 ATTACKS ON THE RUN-TIME ENVIRONMENT THROUGH THE CARD ACCEPTANCE DEVICE (CAD) THREATS FROM CARD APPS AND NEED TO SHARE RESOURCES Clone Future Group 7 Past Group 3 Current THREATS BASED ON RTE IMPLEMENTATION ATTACKS USING CARDS NOT YET ISSUED, OLD CARDS, CLONES CAD Group 4 Group 1 ATTACKS ON CARD’S INTERFACE TO THE OUTSIDE, E.G. PREMATURE REMOVAL Group 2 DIRECT ATTACKS ON CHIP CIRCUITRY INDIRECT ATTACKS ON CHIP CIRCUITRY OP Card Security Threats SOURCE: GAMMA

  17. 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: Kömmerling et al. SOURCE: cryptography.com

  18. SMART CARD POWER CONSUMPTION DURING DES ENCRYPTION 16 DES ROUNDS INITIAL PERMUTATION FINAL PERMUTATION EXPANDED VIEW OF ROUNDS 2 & 3 SOURCE: cryptography.com 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

  19. Smart Card Applications • Ticketless travel: Seoul bus system • 4M cards, 1B transactions since 1996 • Authentication, ID • Medical records • Ecash • Store loyalty programs • Personal profiles • Government • Licenses • Mall parking . . .

  20. Hong Kong Smart Cards • Octopus • 8 million cards, 9000 readers • 7 million transactions/day • Visacash • ComPass Visa (VME) • Mondex • GSM SIM • ePark

  21. 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

  22. Octopus System SOURCE: WORLD BANK

  23. 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 628,000,000 SOURCE: CARDWEB.COM

  24. 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

  25. Mondex Overview SOURCES: OKI, MONDEX USA

  26. 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

  27. Payment Cards EMV = EUROPAY INT’L, MASTERCARD,VISA MPCOS = MULTI PAYMENT CHIP OPERATING SYSTEM • 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

  28. 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 number SOURCE: GEMPLUS

  29. Wireless Card Authorization SOURCE: SAMSUNG

  30. Comparison of Payment Methods

  31. Q A &

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