Dispute Resolution Systems for Security Protocols
Interesting paper by Steven J. Murdoch and Ross Anderson in this year’s Financial Cryptography conference: “Security Protocols and Evidence: Where Many Payment Systems Fail.”
Abstract: As security protocols are used to authenticate more transactions, they end up being relied on in legal proceedings. Designers often fail to anticipate this. Here we show how the EMV protocol—the dominant card payment system worldwide—does not produce adequate evidence for resolving disputes. We propose five principles for designing systems to produce robust evidence. We apply these to other systems such as Bitcoin, electronic banking and phone payment apps. We finally propose specific modifications to EMV that could allow disputes to be resolved more efficiently and fairly.
Ross Anderson has a blog post on the paper.
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mike~acker • February 6, 2014 7:15 AM
Fixing the Point of Sale Terminal (POST)
THINK: when you use your card: you are NOT authorizing ONE transaction: you are giving the merchant INDEFINITE UNRESTRICTED access to your account.
if the merchant is hacked the card numbers are then sold on the black market. hackers then prepare bogus cards — with real customer numbers — and then send “mules” out to purchase high value items — that can be resold
it’s a rough way to scam cash and the “mules” are most likely to get caught — not the hackers who compromised the merchants’ systems .
The POST will need to be re-designed to accept customer “Smart Cards”
The Customer Smart Card will need an on-board processor, — with PGP
When the customer presents the card it DOES NOT send the customer’s card number to the POST. Instead, the POST will submit an INVOICE to the customer’s card. On customer approval the customer’s card will encrypt the invoice together with authorization for payment to the PCI ( Payment Card Industry Card Service Center ) for processing and forward the cipher text to the POST
Neither the POST nor the merchant’s computer can read the authorizing message because it is PGP encrypted for the PCI service. Therefore the merchant’s POST must forward the authorizing message cipher text to the PCI service center.
On approval the PCI Service Center will return an approval note to the POST and an EFT from the customer’s account to the merchant’s account.
The POST will then print the PAID invoice. The customer picks up the merchandise and the transaction is complete.
The merchant never knows who the customer was: the merchant never has ANY of the customer’s PII data.
Cards are NOT updated. They are DISPOSABLE and are replaced at least once a year — when the PGP signatures are set to expire. Note that PGP signatures can also be REVOKED if the card is lost.