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ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Electronic Payment Systems 20-763 Lecture 8: Stored-Value Cards.

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Presentation on theme: "ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Electronic Payment Systems 20-763 Lecture 8: Stored-Value Cards."— Presentation transcript:

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2 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Electronic Payment Systems 20-763 Lecture 8: Stored-Value Cards

3 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Outline Smart card types Operating systems Wireless cards Card manufacture and issuance Security Octopus Geldkarte

4 Banking E-Government Mass Transit Mobile Telecommunications Public Telephony W-LAN Access control Digital Rights Management Enterprise Security Retail Smart Card Applications SOURCE: JEAN-JACQUES VANDEWALLE

5 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS 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

6 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Smart Cards Magnetic stripe –3 tracks, ~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

7 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Magnetic Stripe Cards Three tracks: 1 & 3 at 210 bits/inch; 2 at 75 bpi Start sentinel (1 char): % Format code (1 char): B for bank/financial PAN, Primary Account Number (19 char) –Major industry identifier (1 or 2 char): 4, 5 for credit cards –Issuer (up to 5 char) –Individual account number (up to 12 char) Field separator (1 char): ^ Name Field separator Expiration date (4 char): YYMM Proprietary fields, including Pin Verification Value (P V V)

8 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Other Smart Card Types USB token Java card Memory card Crypto card SIM card SOURCE: ANDREAS STEFFEN

9 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Laser Optical Memory Card Capacity: 1MB - 1GB

10 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Hong Kong Smart ID

11 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Microprocessor Card Adoption SOURCE: DATAQUEST (10/2000) 1999: 500 M microprocessor cards 2004: 1750 M microprocessor cards MILLIONS OF CARDS WORLDWIDE

12 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Smart Card Structure Contacts (8) SOURCE: SMART CARD FORUM Epoxy Microprocessor Contacts Card (Upside-down) Contacts:

13 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Old (8-bit) Smart Card Architecture SOURCE: SMART CARD FORUM EEPROM: Electrically Erasable Programmable Read-Only Memory

14 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Smart Card Components Processors 8-bit, typical clock speed: 5 MHz (8-bit) Optional cryptographic processor 32-bit, clock speed 300 MHz 64-bit, 600 MHz SOURCE: SUMIT DHAR

15 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Smart Card Components ROM: Read Only Memory Used for storing fixed programs. Holds the operating system Typically varies from 2KB to around 16 KB Once written, cannot be changed Occupies the least area PROM: Programmable Read Only Memory Used for loading card serial number Very small, typically just 32 bytes SOURCE: SUMIT DHAR

16 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Smart Card Components EEPROM: Electrically Erasable Read Only Memory Stores variable data Holds various applications and their data. Can be read or written to subject to permissions. Typically 2 - 32 KB RAM: Random Access Memory Used as temporary storage. Erased on power off. Typically 128-512 bytes SOURCE: SUMIT DHAR

17 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS 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

18 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS 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

19 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Cyclic File –READ gives the most recently written record –Maximum number of records: 254 –When maximum is reached, first record is overwritten –Record length: 1.. 254 bytes SOURCE: ANDREAS STEFFEN n+1 st record

20 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS 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 (P V V)

21 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Forming the Pin Verification Value 4-DIGIT PIN ACCOUNT NUMBER SECRET BANK KEYS 3DES ENCRYPTED DATA BLOCK CARD HAS ACCOUNT NUMBER AND P V V PIN VERIFICATION VALUE (P V V) SELECT 4-6 DIGITS FROM ENCRYPTED DATA BLOCK TO FORM P V V

22 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Using the Card CARD HAS ACCOUNT NUMBER AND PVV ATM MACHINE READS ACCOUNT NUMBER AND P V V 4-DIGIT PIN ACCOUNT NUMBER P V VP V V USER TYPES PIN MACHINE NOW HAS: SECRET BANK KEYS 3DES DECRYPTED DATA BLOCK MACHINE HAS BANK KEYS IN HARDWARE: P V VP V V COMPUTE P V V COMPARE CARD P V V WITH COMPUTED P V V P V Vs MATCH? USER IS AUTHENTIC P V Vs DIFFERENT? USER IS REJECTED

23 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS OpenCard Framework (OCF) SOURCE: OPENCARD.ORGOPENCARD.ORG CardService Layer CardTerminal Layer (TALKS TO CARD) (TALKS TO READER)

24 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Card Security Threats Group 1 Group 2 Group 4 Group 5 Group 6 Group 7 CAD Clone Future Past Current Group 3 DIRECT ATTACKS ON CHIP CIRCUITRY INDIRECT ATTACKS ON CHIP CIRCUITRY ATTACKS USING CARDS NOT YET ISSUED, OLD CARDS, CLONES ATTACKS ON CARD’S INTERFACE TO THE OUTSIDE, E.G. PREMATURE REMOVAL ATTACKS ON THE RUN-TIME ENVIRONMENT THROUGH THE CARD ACCEPTANCE DEVICE (CAD) THREATS FROM CARD APPS AND NEED TO SHARE RESOURCES THREATS BASED ON RTE IMPLEMENTATION SOURCE: GAMMAGAMMA

25 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Power and Timing Analysis power consumption time NOP (no operation) MUL (multiplication) JMP (jump) Source: Rankl and Effing, "Handbuch der Chipkarten", 2002

26 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS 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 CONSUMPTION DURING DES ENCRYPTION SOURCE: cryptography.com 16 DES ROUNDS INITIAL PERMUTATION FINAL PERMUTATION EXPANDED VIEW OF ROUNDS 2 & 3

27 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Reverse engineering

28 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Probing with Needles

29 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Contactless Card 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: GEMPLUSGEMPLUS

30 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS RFID Tags 32mm and 23mm capsule transponder IC Chip Antenna

31 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS 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 RFID Reader Antenna Computer Tag SOURCE: PHILIPS

32 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Euro Banknotes European Central Bank has announced plans to implant RFID tags in banknotes by 2005 Uses –Anti-counterfeiting –Tracking money flows

33 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS PAYMENT ON A KEYCHAIN SMALL AND CHEAP

34 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Automated Toll Collection

35 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Hong Kong Smart Cards Octopus –12 million cards, 15,000 readers –7 million transactions/day –$48M HKD per day Visacash ComPass Visa (VME) Mondex GSM SIM, ePark

36 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Octopus Card Features Hong Kong RFID payment card Operating distance: 15 cm Bandwidth: 211 Kb/sec Triple DES in 70  sec EEPROM 1536 bytes 128-byte data backup area 16-byte manufacturer ID; 16-byte issue ID Processing time: 50 msec on card, 300 msec overall Random access and cyclic files Anti-collision protocol SOURCE: MITSUBISHIMITSUBISHI

37 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Octopus Card Security SOURCE: MITSUBISHIMITSUBISHI

38 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Octopus SOURCE: SONYSONY SONY RC-S833 CONTACTLESS SMART CARD I/O SPEED: 211 Kbps SONY READER/WRITER

39 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS SOURCE: CREATIVE STAR Octopus Expansion Identity card Access control Hotel room key Credit card McDonalds Mobile phone Home readers

40 Octopus Clearing SOURCE: CENTRAL CLEARING HOUSE SYSTEM SERVICE PROVIDER CENTRAL COMPUTER LOCAL DATA PROCESSOR SOURCE: SAMMY KAM

41 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Octopus Settlement MTR’S BANK LOAD AGENT’S BANK LOAD AGENT CENTRAL COMPUTER CENTRAL CLEARING HOUSE SYSTEM STATION COMPUTER FARE PROCESSORS SERVICE PROVIDER CENTRAL COMPUTERS (SPCC) HSBC HEXAGON SETTLE MENT MTR CENTRAL COMPUTER MUTUAL AUTHENTICATION CHECK BLACKLIST UPDATE CARD STORE TRANSACTIONS DISTRIBUTE SOFTWARE COLLECT TRANSACTIONS PRINT REPORTS SEND DATA TO SPCC CONSOLIDATE DATA PRINT REPORTS ROUTE DATA TO CCHS VALIDATE DATA NET ACCOUNTING CCHS OCTOPUS BANK REGULAR ACCT BUFFER ACCT RESERVE ACCT

42 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Major Ideas Smart cards replace cash Potential of cards is unexplored; new uses every day Powerful microprocessors allow –cryptography –certificates, authentication –secure purses Wireless (contactless) cards enable new business models Smart card security is not perfect

43 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Q A &

44 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

45 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS Mondex Overview SOURCES: OKI, MONDEX USA

46 ELECTRONIC PAYMENT SYSTEMS 20-763 SPRING 2004 COPYRIGHT © 2004 MICHAEL I. SHAMOS 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

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