Secure Electronic Transaction(SET)

Suraj DhalwarSushant TodkarSnehit Deokar

Chinta Yashwanth

Outline: History SET and Requirements Key Features SET Participants Events in SET Key Technologies in SET Dual Signature Conclusion

History/Background:

-Internet shopping didn’t quite pick up as consumers considered financial transactions over the internet, unsafe-Lacks the one on one transaction feeling.-Visa & MC came up with the idea what we call as SET.

What is SET? SET is an open encryption and security

specification designed to protect credit card transactions on the Internet.

SET is in effect a set of protocols for ensuring security and confidentiality.

SET is a relatively new standard. It was first used in February 1996 and was proposed by Visa and MasterCard.

Requirements That SET Must Accomplish

Provide confidentiality of ordering and payment information.

Ensure the integrity of all transmitted data Provide authentication that a cardholder is a

legitimate user of a credit card account. Provide authentication that a merchant can accept

credit card transactions through its relationship with a financial institution.

Key Features of SET Confidentiality of information.

Integrity of Data.

Cardholder account authentication.

Merchant authentication.

Confidentiality of Information

A credit card holder’s personal and payment information is secured as it travels across the network. An interesting feature of SET is that the merchant /seller never sees the credit card number; this is only provided to the issuing bank. Conventional encryption using DES is used to provide confidentiality.

Integrity of Data

Payment information sent from cardholders to merchants include order information, personal information and payment instructions. SET guarantees that these message contents are not altered in transit. RSA digital signatures, using SHA-1 hash codecs, provide message integrity.

Cardholder Account Authentication

SET enables merchants to verify that a cardholder is legitimate user of a valid card account number. SET uses X.509v3 digital certificates with RSA signatures for this purpose.

Merchant Authentication

SET enables cardholders to verify that a merchant has a relationship with a financial institution allowing it to accept payment cards. SET uses X.509v3 digital certificates with RSA signatures for this purpose.

SET Participants Cardholder Merchant Issuer Acquirer Payment Gateway Certification Authority

SET Components and Participants

Cardholder & Merchant Cardholder

– This is an authorized holder of a payment card (e.g, MasterCard, Visa) that has been issued by an issuer.

Merchant– This is a person or organization who has things

to sell to the cardholder. A merchant that accepts credit cards must have a relationship with an acquirer

Issuer & Acquirer Issuer

– This is a financial institution such as a bank that provides the card holder with the payment card.

Acquirer– This is a financial institution that establishes an account

with the merchant and processes credit card authorizations and payments. The acquirer provides authorization to the merchant that a given card account is active and that the proposed purchase does not exceed the credit limit. The Acquirer also provides electronic payments transfers to the merchant’s account.

Payment Gateway This is a function that can be undertaken by

the acquirer or some third party that processes merchant payment messages.

The payment gateway interfaces between SET and the existing bankcard payment networks for authorization and payment functions.

Certification Authority(CA) This is an entity that is entrusted to issue

X.509v3 public-key certificates for cardholders, merchants, and payment gateways.

X.509 Authentication Service• X.509v3 – this is an authentication service

which includes a public – certificate associated with each user. Certificates are assumed to be created by some trusted Certification Authority(CA), and then placed in a directory that can be viewed by others who need to verify the public-key of someone. CA signs the certificate with its private-key thereby authenticating the fact that this key does indeed belong to a user A.

X.509 Certificate

X.509 Certificate Version: there are differences between

different versions of certificates. Serial Number: unique integer value. Issuer name: CA that created and signed the

certificate Period Of Validity: expiration date.

X.509 Certificate Cont’d Subject Name: The name of the user to

whom the certificate refers. Subjects Public-key Information: public-key

of the subject. Signature: Covers all other fields of the

certificate; it contains a hash code of all other fields, encrypted with the CA’s private key.

Events required for a Successful SET Transaction

1. Customer Opens an account – customer gets a credit card account from, such as a Visa or MasterCard, with a bank that supports SET.

2. The Customer receives a certificate – the customer receives an X.509v3 digital certificate which is signed by the bank. This certificate verifies the customers public key and it’s expiration date.

3. Merchant Certificates – the merchant must have two(2) certificates for the two public keys it owns. One for signing messages with and one for key exchange. The merchant also needs a copy of the payment gateway’s public-key certificate.

4. The customer places an order.

Events required for a Successful SET Transaction Cont’d

Events required for a Successful SET Transaction Cont’d

5. Merchant Verification – The merchant sends an order form to the customer, as well as a copy of the merchants certificate, so the customer can verify that he/she is dealing with a valid store.

6. Order & Payment Sent – The customer sends order information (OI) and payment information(PI) to the merchant together with the customers certificate so the merchant can verify that he is dealing with a valid customer. The PI is encrypted in such a way that the merchant cannot read it.

Events required for a Successful SET Transaction Cont’d

7. Merchant Requests PI authorization – The merchant forwards the PI to the payment gateway, to determine whether the customer has sufficient funds/credit for the purchase.

8. Merchant Confirms the order – merchant sends confirmation of the order to the customer.

9. Merchant ships goods and services.10. Merchant requests payment – this request for

payment is sent to the payment gateway, which handles payment processing

Key Technologies of SET Confidentiality of information: DES Integrity of data: RSA digital signatures with

SHA-1 hash codes Cardholder account authentication: X.509v3

digital certificates with RSA signatures Merchant authentication: X.509v3 digital

certificates with RSA signatures Privacy: separation of order and payment

information using dual signatures

Concept: Link Two Messages Intended for Two Different Receivers:– Order Information (OI): Customer to Merchant– Payment Information (PI): Customer to Bank

Goal: Limit Information to A “Need-to-Know” Basis:– Merchant does not need credit card number.– Bank does not need details of customer order.– Afford the customer extra protection in terms of privacy by

keeping these items separate. This link is needed to prove that payment is intended for this

order and not some other one.

SET’s Dual Signature

Why Dual Signature?

Suppose that customers send the merchant two messages:• The signed order information (OI).• The signed payment information (PI).• In addition, the merchant passes the payment information

(PI) to the bank. If the merchant can capture another order information (OI) from

this customer, the merchant could claim this order goes with the payment information (PI) rather than the original.

Dual Signature

Purchase Request – CustomerThe cardholder generates a one-time symmetric encryption key, KS,

Merchant Verifies Purchase Request

When the merchant receives the Purchase Request message, it performs the following actions:– Verify the cardholder

certificates by means of its CA signatures.

– Verifies the dual signature using the customer’s public key signature.

Merchant Verification (cont’d)

– Processes the order and forwards the payment information to the payment gateway for authorization.

– Sends a purchase response to the cardholder.

Payment Gateway Authorization1. verifies all certificates2. decrypts digital envelope of authorization block to obtain

symmetric key & then decrypts authorization block3. verifies merchant's signature on authorization block4. decrypts digital envelope of payment block to obtain

symmetric key & then decrypts payment block5. verifies dual signature on payment block6. verifies that transaction ID received from merchant

matches that in PI received (indirectly) from customer7. requests & receives an authorization from issuer8. sends authorization response back to merchant

Payment Capture merchant sends payment gateway a

payment capture request gateway checks request then causes funds to be transferred to

merchants account notifies merchant using capture response

SET Overhead

Simple purchase transaction: Four messages between merchant and customer Two messages between merchant and payment gateway 6 digital signatures 9 RSA encryption/decryption cycles 4 DES encryption/decryption cycles 4 certificate verifications

Scaling: Multiple servers need copies of all certificates

Advantages:

-Privacy: Uses 1024 bit public key cryptography which renders the intercepted message unreadable !-Integrity: Hashing & signing ensures message sent is unaltered.-Authentication: Uses digital certificates to ensure the parties are really who they claim to be.

CONCLUSION -Uses 1024–bit cipher keys, making it one of the strongest encryption applications.-If we use 100 computers each processing 10 MIPS, it would take 2.8 x 10 11 years to break just ONE encrypted message !!!!

Source: http://www.rsa.com/set/html/howstrong.html