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Smart Cards and E-BUSINESS

What is a Smart card? A smart card is the size of a conventional

credit card, with an electronic microchip embedded in it.

The chip stores electronic data and programs that are protected by advanced security features

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Smart Cards Standards

ISO 7816 defines the physical dimensions of smart cards and their electric characteristics

ISO 7816 establishes commands to read, write and update records

ISO 7816 specifies transmission protocols

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How many kinds of smart cards exist?1 -Contact smart card inserted

into card reader

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2 - Contactless Smart cards: should be passed near an antenna to carry out transaction

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How many Kinds of Smart Cards with respect to Architecture Memory Cards: EEPROM +security logic

optimized for certain application

Microprocessor Cards: consist of CPU+EEPROM,ROM, RAM & I/O

Allows several applications to be on one card

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Why are smart cards important?

To reduce fraud in finance and payments: up to 0.2% of turnover in major credit and debit card systems around world-nearly $1 billion a year-is fraudulent

Many smart cards are used in sensitive areas such as personal identification and health

If security is compromised, the resulting publicity could affect public confidence

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Why are smart cards secure? Smart cards protect information stored on them

from damage or theft by using strong encryption techniques

Algorithms such as RSA, DES, or triple DES can be used with very long keys up to 1024 bits

Hence they are much more secure than magnetic strip cards which can be copied easily

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Smart Cards Advantages

Security Convenience(compatible with portable

electronic devices like:phones, PDAs & PCs

Economic Benefits Customization Multifunctionality

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Faster

More reliable than magnetic cards

Can store 100 times more than magnetic cards

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Can Smart Cards Support Multi-Applications?

Capability to download independent Applets, securely Isolated

Example: A card may contain Individual’s driver’s license, multiple credit card & bank accounts, stored value for company cafeteria, & health records

A police officer’s card reader can read driver’s license info, but not bank account

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HistoryHistory

The first smart cards wereintroduced in 1970 in JAPAN.The idea was patented in Europein 1974, and to date over 3billion smart cards have beensold around the world

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Where is Smart Card used? Electronic Purse( digital Cash) E-Business over the Internet Telecommunication Access control & personal identification Credit & debit ( Visa Master card) Transport( ticketless airline,bus,taxi) Pay TV & loyalty

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How smart is a smart card?

Some smart cards are smarter than others Simplest cards like payphone cards,

vending machine cards ( containing only memory +simple protection logic) offer no protection if stolen

The smarter smart cards ( CPU cards) might have several passwords restricting use for only one person ( card holder)

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For added security ( especially in financial applications and in access control)

Authentication & encryption techniques are widely used to verify true identity of the card holder

Some smart cards used in sensitive areas where security cannot be compromised ,use security processors embedded in the card like cryptoprocessors with RSA or DES on it

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What is electronic purse? The electronic purse carries value on a smart

card in place of notes and coins The purse is designed to replace cash for small

transactions One of the greatest potential benefits is

multifunctionality where other applications such as public telephone payment, parking and road toll payment as well as credit & debit could be added

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How does E-Purse Work?How does E-Purse Work?

E-purses are usually issued by banks to their customers

Money is loaded into the e-purse by transfer from cardholder’s bank account using: ATM, or public payphone, or a home smart phone, a mobile phone or through internet

Once cardholder has chosen goods, he inserts card into POS and money is debited

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Examples Of E-Purse

Mondex

Visa Cash

Digi Cash

Cyber Coin

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E-purse benefits

No need to carry loose change to buy newspaper or use vending machine

more convenient than checks and debit cards for small transactions

Offer user more privacy and freedom from recording expenditures in check book

Attractive to merchants: Saves time

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What Is a Digital Signature ?

Used To Establish Authenticity of Electronically Transmitted messages

Only one Smart Card Can Sign a Document

Every One Can Verify The Signature RSA algorithm is usually used to form a

cryptographic checksum which is appended to the message

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Smart cards in bankingSmart cards in banking

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Providing Value Added services

GSM Cellnet and Barclaycard developped wireless finantial service smart card

SIM activates user’s Cellnet GSM phone Provides a Barclay services menu

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Swedish Bank Utility Bill Payment

SIM card allows users to access service by menu navigation

Users can pay their utility bills away from home by keying information such as origin and destination bank account numbers

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Press releases

Cyberflex Access is the first commercial smart card to combine java programmability and strong cryptography

The card uses authentication, in addition to RSA, DES and triple DES algorithms.

Programmers can develop secure applications by calling in their Java programs cryptographic services available in the card API

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With 16K EEPROm, you can store applets as well as cryptographic keys and digital certificates

Hong Kong July 29,1999: Hong Kong mobile network company has upgraded 250,000 subscribers for programmable multi-service Simera32 Java compatible SIMS.

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The company is the first in ASIA to allow its subscribers to download services over air

Master card has developed the complete Chip solution to migrate their 600 million master card credit and debit cards to chip platform

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The latest edition of ST19 , is the smart card IC from Stmicroelectronics is aimed at high end telecom, java cards and similar multi application cards

This new smart card complies with Javacard api 2, allows downloading huge applets to EEprom

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RACAl Security and payments has introduced the DATACryptor 2000 a public key managed, triple des link encryptor to protect valuable network data.

It uses triple DES ( 168 bits) it transmits encrypted data at speeds of up to 512 K bits/sec

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What Are contactless Smart Cards

Energy and data transferred without electrical contact between card and terminal

Distance: few centimeters -1 meter Commonly used frequencies: 125KHz &

13.5 MHz Power from terminal over carrier frequency

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Main Applications

Access Control Vehicle identification Electronic driver license Ski Passes Airline tickets Transportation: buses, taxis & underground Baggage Identification

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Advantages Of Contactless Cards

No need to remove from purse or pocket Can Collect & analyze customer utilization

data Freedom of orientation of card(Increases

customer acceptance) Less maintenance needed than contact cards Longer life cycle

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Provides high passenger throughput Less queuing Delivering speed Reliability Security

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MIFARE developped Combi card for public transportation(dual interface)

Frequency:13.5MHz, data rate >100KB/s Fast Anti collision algorithm Range:10 Cms Up to 16 independent applications on card Access to card protected by encryption

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Provides highest level of security by using 3 DES Encryption Algorithm & Cryptoprocessor

Mifare Prox(High speed 3-DES coprocessor) Contains true Random number generator Used in Taxi, Buses, subways, electronic

payment in shops. 85% of contactless cards are Mifare

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SMART CARD MARKET BY THE YEAR 2 0

1

0France

11%

Europe40%

The World49%

France

Europe

The World

Total Smart Cards in the Market =

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WORLD WIDE MARKET PROSPECTS OF THE STORED-VALUE CARD

800

600550

0

100

200

300

400

500

600

700

800

Europe U.S.A. Asia/Pacific

International Potential Market

1,950 Billion dollars

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The Future Market researcher Dataquest forecasts that by year

2001, 3.4 billion smart cards will be used world-wide: Multi application card

Main future areas are in biometrics: using retina scan

National identity cards: all citizens by law will be required to carry identity smart cards

RF contactless cards are expected to be widely used

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3,85 billion smart cards expected in 2002 Microprocessor smart cards ranging

between 21 billion-35 billion by 2010 Number of microprocessor smart cards to

increase at rate of 55% per year 25 billion ecash transactions by 2005, 30%

of these are using smart cards

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Smart Cards & Terminals Cost

Memory Cards: $.1-$.4 POS Terminals: $150-$1500 Microprocessor Smart Cards: $2.00-

$10.00(depending on capacity and complexity)

Smart Card Readers/Writers:$100-$250