Your Presenter Amer Sharaf

Electronic Payments: Where do we go from here? ByMarkus Jakobsson David Mraihi Yiannis Tsiounis Moti Yung

Introduction  The Problem: Achieving the full Potential of online commerce.  Reasons: lack of convince and security of current payment methods  Want: Privacy and security.

Outline:  Credit Cards  Electronic Checks  Categorize some schemes.  Examples of payment systems

Credit Cards:  The internet payment method of choice today is the traditional credit card.  Why do people use credit cards?  Are they secure?  What do credit cards lack?

Credit Cards:  They are wide spread but they lack:  Anonymity  Security  Inability to reach everyone  Moreover:  They require Large overhead  They don’t allow small payments

Credit Cards: Security  Security problems:  All info is exposed to the merchant  There is a greater threat over the internet where merchants can be located anywhere  All purchases are traceable  Variable cost:  Fixed charge of 2-4.5% (higher on internet)  This cost reflects the security problems

Where do we go from here?  We lack efficient consumer oriented payment methods  We want new payment methods that are secure and efficient.

E-Checks:  A growing payment method  An E-Check is the electronic version or representation of paper checks.  They are a sequence of bits that encode a value, and using either digital or other crypto techniques allows a receiver to distinguish between valid and invalid bit sequences.

E-Checks:  eChecks:  same information as paper checks  based on the same legal framework as paper checks  Used in any and all remote transactions  Exchanged directly between parties  enhance checking accounts capabilities

PayeePayer Payee’s BankPayer’s Bank Electronic Funds Transfer Deposit Echeck Write Echeck, Sign Electronic Check Cash and Transfer Flow Endorsed Echeck Post EFT Credit

E-Checks: Security  eChecks are secure payment instruments. It uses the state of the art security techniques of :  authentication  public key cryptography  digital signatures digital signatures  certificate authorities  duplicate detection

E-Checks:  Why aren't people using it?:  Not as widespread/quick as credit cards  Doesn’t provide total anonymity

Categorizing Schemes

Schemes with Perfect Privacy:  Perfect Privacy = payment mechanism that hides all consumer information  With today’s schemes info the we consider private can be gathered easily:  In every connection there is an IP address  IP could be used for tracing

Anonymity can be achieved:  Using some type of bearer instruments just like cash.  Zero-knowledge techniques.  Blind signature techniques.

Schemes with Revocable Privacy  Privacy can cause problems in the regulatory and legal levels.  Just like with money there exists problems such as money laundering, buying illegal goods, etc.

Solution:  All Consumers encrypt their private info under the key(s) of the administrative authorities.  When revocation is ordered the encrypted data are given to the authorities.

Schemes without Privacy   Everything about the the consumer is revealed.  An example: The bank holds the consumer’s info but prevents disclosure to other parties. Complete lack of anonymity limits consumer appeal.

Schemes with Large Payments  With large payments it is required that transactions must be recorded.  However, consumers are unlikely to use a payment mechanism for large sums if:  They cant obtain transaction records  They cant be assured of the security of the mechanism. Consumers want to be sure that large online payments are as safe and efficient as telephone payments

Schemes for Small Payments:  With small payments consumers want:  Efficiency  Anonymity  Simplicity  For electronic commerce to be successful, we must make it feasible to process very small transaction cost effectively

Example of some Schemes

Scheme: Net Bill  Consumers use a NetBill account, which is pre-funded using a credit card to purchase goods.  Lets Look at an Example

Net Bill

NetCash/NetCheque:  NetCheque works just like e- check.  NetCash is an electronic form of currency that provides anonymous digital payments over an unsecure network.

Secure Electronic Transaction (SET):  The SET™ Specification is an open technical standard for the commerce industry developed by Visa and MasterCard.  SET uses digital signatures.  Here is how it works…..

Demonstration Of SET

DigiCash:  DigiCash involves a blind signature technique.  The bank withdraws one dollar from Alice's account and makes it worth one dollar by digitally validating it.

Conclusion:  We have looked at some of the past issues with electronic payments  This is a challenging and promising area.  At the end it is what the consumers and merchants want that gets implemented. Its only a matter of time.

References: Electronic Payments: where do we go from here? Markus Jakobsson

Digital Signatures: Back