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

20-763 ELECTRONIC PAYMENT SYSTEMS

FALL 2001

COPYRIGHT © 2001 MICHAEL I. SHAMOS

Electronic Payment Systems20-763

Lecture 9Smart and Stored-Value Cards


FALL 2001


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


FALL 2001


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


FALL 2001


Smart Card Costs

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


FALL 2001


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

http://www.newengland-partners.com/images/

Micropayments

SOURCE: SMARTCARDCENTRAL.COM

http://www.smartcardbasics.com/typesofchips.html


FALL 2001


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 2001


Smart Card Structure

Contacts (8)SOURCE: SMART CARD FORUM

Epoxy

Microprocessor

Contacts

Card(Upside-down)

Contacts:


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Old Smart Card Architecture

SOURCE: SMART CARD FORUM

EEPROM:ElectricallyErasableProgrammableRead-OnlyMemory


FALL 2001


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


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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 2001


OpenCard Framework (OCF)

SOURCE: OPENCARD.ORG

CardServiceLayer

CardTerminalLayer

(TALKS TO CARD)

(TALKS TO READER)


FALL 2001


MULTOS Administration

SOURCE: MULTOS

14-COMPANY SMARTCARD CONSORTIUM


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Open Platform Card Specification

SOURCE: GAMMA


FALL 2001


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 2001


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 2001


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 2001


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 2001


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 . . .


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Hong Kong Smart Cards

• Octopus– 8 million cards, 9000 readers– 7 million transactions/day

• Visacash• ComPass Visa (VME)• Mondex• GSM SIM• ePark


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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


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Octopus System

SOURCE: WORLD BANK


FALL 2001


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 2001


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 2001


Mondex Overview

SOURCES: OKI, MONDEX USA


FALL 2001


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 2001


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 2001


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


FALL 2001


Wireless Card Authorization

SOURCE: SAMSUNG


FALL 2001


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 2001


QA&

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

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