Electronic Payments

Introduction Online electronic payments are not tantamount to electronic payments. In the emergence of e-commerce, credit cards have long been represented by electronic means of payment, credit cards in shopping malls. Many hotels and other places and items could swipe of the card, POS terminals Regulations, ATM cash forms of payment. And online electronic payments, online payments also known as electronic currency, broadly speaking, refer to a transaction in the online exchange of funds; It is a network-based electronic financial, a business card transactions for all types of electronic tools and media,the electronic computer and communications technologies as a means Electronic data (binary data) stored in the bank's computer system. and through the computer network system in the form of the flow of electronic information transfer and payment. Electronic Payment System is the basis for online payments, and online payments system development is a higher form of electronic payment. It makes electronic payment may, at any time, through the Internet directly to the transfer, settlement and form e-business environment.  COMMON ONLINE ELECTRONIC PAYMENT SYSTEM In online shopping online electronic payment function is the key issue to ensure the consumers are fast and convenient, we have to ensure the safety and secrecy of the parties to a transaction, which requires a complete electronic trading systems. 1. ELECTRONIC PAYMENT AND ONLINE ELECTRONIC PAYMENT Including online credit card, smart card (IC card) payment systems are established in accordance with the standards set shopping and payment system. Internet users in specific ways: sending banks coast and password encryption sent to the bank for payment. And the payment process for customers, merchants and verify the legitimacy of a request for payment. At present, domestic banks had set up such a bank cards for online payments. If the Bank of China's "Great Wall Electronic Debit Card", the China Construction Bank "Brunca" The Industrial and Commercial Bank of China's "Peony credit cards," Merchants Bank's "Smart Card", is safe, convenient features, is an ideal tool for online payments, online shopping is currently in line to pay the principal means of achieving. Based on the bank card payment the following four models: 1) No security model Its features: users complete control of the bank card business information, the transmission of messages without bank card security. 2) Through third-party brokers paid model Its characteristic is as follows: Bank card information is not open to the transmission network, is paid by users. Both businessmen trusted third party (agents) to complete.  3) Simple encrypted payment system model  Its characteristic is as follows: the use of encryption technology to bank cards and other critical information encrypted digital signature to confirm the authenticity of the message. Business servers and the need for software support services.  4) SET (security electronic transaction) model "Secure Electronic Transactions," and referred to the SET. In an open Internet is a realization of the international agreements and standards for secure electronic transactions. Their characteristics are as follows: SET transactions participants to provide certification to ensure data security, integrity and nonrepudiation of transactions, in particular to ensure that no information leaked to the cardholder's account for the businesses. Guarantee the safety of the SET. Such a system more suited to the B to C mode of transaction.    2.E-Cash (Electronic-cash) Internet Payment System Definition:- An anonymous electronic cash system; equivalent to "cash" or "printed bank notes" except that it is transferred through networks with bits of information, in essence it is just another representation of monetary value; anonymity is preserved through public key cryptography, digital signatures, and blind signatures. E-cash is a form of data, the currency in circulation, there is electronic cash currency; it can be converted to cash a series of encrypted numerical sequence number, and then use these sequences to show the value of all sizes. Pay model is shown as Fig. : Its characteristic is as follows: an agreement between the banks and businesses and authorization, identity verification by e-cash to complete it, electronic cash can be kept, admission, and transfer to smaller transactions. E-cash and e-payment systems also have the advantage of cash, mainly as follows: Anonymity; Not shadowing; Savings on transaction costs; Savings on transmission costs; Poor risk; Pay flexibility;Prevent forgery and repeatability.As electronic cash is the "cash" characteristics of China's small general merchandise purchase payment habits, it is likely to become an important means of online payments in China, but China has not yet formally started using. There are many foreign companies to offer electronic cash market. If Digit Cash the unconditional anonymous electronic cash market, Net cash can be provided by anonymous electronic cash market. 3.E-purse Internet Payment System Users use e-purse shopping, the first in a personal bank account and users into a certain amount; then the corresponding electronic wallet service system free software to download and install an electronic purse;then download the corresponding website to apply online and access the cardholder "electronic safety certificate". Users shopping, the only direct hits "electronic wallet" icon and following the importation of their coast. Corresponding information such as passwords by e-purse will pay to complete the follow-up work.Modex foreign companies such as a smart card as an e-purse to the online payment system. E-purse is sporadic small payment transactions. always used in conjunction with bank cards to help users complete the entire shopping process. 4.Electronic check (E_check) Internet Payment System Electronic check transfer payments from paper checks to the merits of using digital tansmission to transfer money from one account to another account. These electronic check payments in businesses and banks linked to the online password transmission. Most common use encryption keys handwritten signature or personal identification numbers instead of signatures. Thus ensuring the safety of this form of payment. Electronic check-cashing process is shown as in the Fig. Electronic check system at present is an exclusive network system, the international financial institutions, through their own private networks, equipment, software and a complete set of user identification, the standard messaging, data validation and other standardized data transmission agreement completed, thus ensuring safety. In the public system will gradually transition to the future for Internet transmission. This B to B to pay mainly for the payment of transaction needs. E Cash Relevance to business and electronic commerce: Even though there are more than 25,000 companies conducting business on the Internet, consumers are still not that confident with having transaction done over the Internet. This is mostly due to a lack of a readily available and secure payment system. With credit cards, consumers are concerned with the security of their information and thus deterring them from directly making purchases from the Internet. With ecash, hopefully consumers will be more comfortable with transactions over the Internet as it is a one-time transaction that cannot be traced back to the user, whereas with credit cards, hackers can obtain information of the card holder and commit frauds. With the appearance of ecash, the need for commercial banks to be involved in electronic banking and to back the electronic currencies becomes more apparent. However, there remains a skeptical view about having monetary transactions done over the Internet as it is a fairly public domain where there is easy access. Thus increasing and promoting commercial bank's interest in the Internet and conducting business over the Internet is necessary in order to further the development of ecash and commerce in the Internet, as well as improving cryptography and security features of the systems. Overview of Electronic Cash Payment Protocols and Systems An electronic cash payment system usually is developed based on an electronic payment protocol which supports a series of payment transactions using electronic tokens or coins issued by a third party. There are three types of users: - a payer or consumer - a payee, such as a merchant - a financial network with whom both payer and payee have accounts. The basic attributes of cash payment : Acceptability: Cash almost universally acceptable as a form of payment, regardless of the transaction amount. Guaranteed payment: cash guarantees the payment after the transaction is over. There is no risk of it been rejected or bounced. No transaction charges: cash is handled from buyers to sellers with no transaction charges. Anonymity: many other forms of payment involve a paper trail linking either or both parties with the transactions. Cash allows transactions take place anonymously. Actors Involved in Electronic Cash Payment Systems Customers :Customers use the digital cash payment systems to make purchases. Dealers: Dealers have to bear the costs of payment transactions. Providers for digital payment systems: Providers are intermediaries between dealers and financial institutions. They provide services and training. Financial institutions: Banking systems or organizations who use electronic payment systems. Trust Centers: They control digital signature keys, and help to secure customer confidence in certain payment systems. They are responsible for the integrity of transmitted data and authenticity of contractors. Basic Requirements for Electronic Cash Payment Systems Digital money: Payment systems must provide customers and private households with acceptable digital money. Security: Ensure the security of transactions and information privacy of users. Scalability: A large number of customers and concurrent transactions should be handled in a scalable manner. Efficient and effective: Payment systems must support efficient and effective payment processing and accounting services for small payment transactions. Simple and lost cost: Payment systems must provide customers with simple and low cost transparent transactions. Anonymous: Usually, customers wish to stay anonymous for all involved transactions.. Double spending: Digital coins consists of a number of bits. Payment systems must be able to recognize and/or prevent repeated payments with the same digital coin. Exchange: Digital money should be convertible into "real" money whenever necessary. Store: Digital money must be stored locally on hard disks or other media. Value: Digital cash payment systems must provide a large number of digital coins for circulation and perform authentication checking. Transactions Types in Electronic Cash Payment Systems Three types of transactions: Withdrawal: the payer transfers some of money from the bank account to his or her payment card. Payment: the payer transfers the money from the card to the payee. Deposit: the payee transfers the money received to the bank account. Two types of implementations: On-line payment: --> the merchant calls the bank and verifies the validity of consumer's token or electronic coin before accepting the payment and delivering the merchandise. Off-line payment: --> the merchant submits consumer's payment for verification and deposit sometime after the payment transaction is completed. Eectronic Cash Payment Protocol: ECash What is Ecash? Ecash was developed to allow fully anonymous secure electronic cash to be used on the Internet to support online trading between buyers and sellers. Overview of Ecash: Ecash is a payment protocol for anonymous digital money on the Internet. It is developed by DigiCash Co, of Amsterdam, The Netherlands. It is currently implemented and offered by Mark Twain Bank, St. Louis since 1995. DeutscheBank Ag, Frankfurt (Main) offers Ecash as a pilot project to its customers since October 1997. Ecash model: Three participants are involved in Ecash payment model: clients, merchants and banks. Client wallet software: Clients have Ecash wallet software (cyberwllet) on their computers. Chey can use Ecoins in their wallet to make purchases from merchants. Withdraw coins from their accounts in a Ecash bank. Store and manage client's coins, track all transactions. Merchant software: Accept and process payments Interact with Ecash bank to perform validation and authentication Sell items and generate receipts. Banks: clients and merchants have accounts at an Ecash bank. Manage and maintain accounts of clients and merchants Ecash Coins: Ecash coins are pieces of data that can be copied.The value of Ecash coins cannot be included with the serial number in the fields of the coin. Use a different signature key for each coin denomination. Example: $1 Coin = Serial#, keyversion, {Serial#} SK Bank's $1 Key Security mechanisms: Using RSA public-key cryptography. 'blind signature' is the foundation of Ecash privacy feature. Every user in the system has their own public/private key pair. Double-spending prevention: To ensure that a serial number is not spent twice, the minting bank must record every coin that is deposited back to that bank. A) be signed, with any denominational signature, by the bank. B) Have an expiry date associated with it that is later than the present date. C) Not appear in the DB of spent coins. Blind Signatures:- In cryptography a blind signature as introduced by David Chaum is a form of digital signature in which the content of a message is disguised (blinded) before it is signed. The resulting blind signature can be publicly verified against the original, unblinded message in the manner of a regular digital signature. Suppose Charlie wants Dianne to sign a message m, but does not want Dianne to know the contents of the message. This might seem like a strange thing -- why would Diane sign something without knowing what it is? But the concept has useful applications in situations involving anonymity, such as digital cash and electronic voting. The arrangement works like this: Charlie "blinds" the message m, with some random number b (the blinding factor). This results in blind(m,b). Dianne signs this message, resulting in sign(blind(m,b),d), where d is Dianne's private key. Charlie then unblinds the message using b, resulting in unblind(sign(blind(m,b),d),b). The functions are designed so that this reduces to sign(m,d), i.e. Dianne's signature on m. Example :- Banks public key = 17 (n=77) Banks private key = 53 Alice's  message = 28 Alice chooses a blinding factor=6 Alice asks Bob to sign 28*6^17 mod 77 = 70 Bob signs 70 and sends Alice 70^53 mod 77=42 Alice can compute 42.6^-1(mod 77) to get 7 Note that 2853 mod 77 = 7 Method How It is implemented :- •      Alice's Username = 2510 •      Alice picks a random number r = 1500: •      S=2510 Å 1500 = 3090 •      The username can now be split into 2 parts –      1500 and 3090 •      On their own they don't reveal the username, but when combined using the XOR, the username is revealed –     1500 Å 3090 = 2510 A Typical Coin:- Header Information – 100$ Serial number - 123456 Transaction Item – pairs of user IDs User ID:                          1500                3090                         4545                6159                         5878                7992 A Typical Coin (before spending):- Header Information – 100$ Serial number - 123456 Transaction Item – pairs of user ID's User ID:                          1500    XOR   3090 = 2510                         4545    XOR   6159 = 2510                         5878    XOR   7992 = 2510 Spending Cash:- Alice presents a token to a Merchant Merchant asks Alice to reveal part of each user ID pair Merchant decides if  he wants to know the right half or the left half Alice blanks out the other half Blanking:- Randomly Blank one side User ID:                          0                      3090                         4545                6159                         5878                7992 User ID:                          0                      3090                         4545                0                         5878                0 The coin is now spent:- User ID:                          0                      3090                         4545                0                         5878                0 You can no longer tell who owns the coin Merchant would now deposit this coin into the bank Note that token has half of user ID pair revealed Bank verifies token and adds to database of  spent tokens The coin is copied and spent at another merchant:- Before the user spent the coin the first time, the user made a copy of it User ID:                          1500                0                         4545                0                         0                      7992 Merchant would now deposit this coin into the bank How can we catch the user? :- This is what is in the bank Original Coin User ID:                            0                    3090                         4545                   0                         5878                   0       Duplicate Coin User ID:                          1500                   0                         4545                   0                            0                   7992 3090 XOR 1500 = 2510-> User id 5878 XOR 7992 = 2510-> User id Probability of catching the culprit:- Depends on the number of the identity strings used Probability of catching a user is: 1 - ½^n , where n is the number of identity strings E.g. n = 10, the probability of catching a user is: 0.999