The bank fraud blame game

[Anne & Lynn Wheeler]

Peter Gutmann wrote:
> (The usage model is that you do the UI portion on the PC, but perform the
> actual transaction on the external device, which has a two-line LCD display
> for source and destination of transaction, amount, and purpose of the
> transaction.  All communications enter and leave the device encrypted, with
> the PC acting only as a proxy.  Bill of materials shouldn't be more than about
> $20).

The decade or so old EU FINREAD standard is along this line ... sort
of modeled after point-of-sale terminal ... includes its own display and
pinpad (countermeasure to keyloggers). lots of past posts mentioning
EU FINREAD standard
http://www.garlic.com/~lynn/subintegrity.html#finread

the actual communications that enter and leave aren't required to
be encrypted ... the communication that enter are revalidated on
the display ... and the communication that exits is on the order
of an x9.59 transaction
http://www.garlic.com/~lynn/x959.html#x959

that are armored with digital signature (integrity and authentication)
... misc. posts mentioning "naked" transaction metaphor
http://www.garlic.com/~lynn/subintegrity.html#payments

old aads chip strawman from nearly decade ago postulated form factor
agnostic ... that could even be added to existing pda/cellphone for
a lot less and communicate wirelessly.
http://www.garlic.com/~lynn/x959.html#aads

in the mid-90s, the x9a10 financial standard working group had been given
the requirement to preserve the integrity of the financial infrastructure
for all retail payments. part of the detailed end-to-end threat and
vulnerability analysis was not only the end-point vulnerabilities
but also the large number of business processes that are giving rise
to security breaches and data breaches that have frequently made
the press. part of x9.59 transaction armoring was that all the
transaction information could be readily exposed and still not
be useful to attackers for performing fraudulent transactions.
This was countermeasure to all the breaches ... regardless of whether 
insiders or outsiders were involved ... it was recognized that
the transaction information had to be exposed in a large number
of business processes. Recognizing the impossibility of 
eliminating all such information exposure ... the x9.59 approach
was to eliminate the risk and fraud associated with such exposures
(i.e. impossible to eliminate all the breaches ... so eliminate
the risk and fraud associated with such breaches).

We had previously been called in to consult with small client/server
startup that wanted to do payment transactions on their server
http://www.garlic.com/~lynn/subnetwork.html#gateway

and had this technology called SSL that they wanted to use. The
issue in SSL was that it hid the information was moving across
the internet ... but left it totally exposed at all other
points (and in fact the numerous business processes required
such exposure). the x9.59 approach was then to try and eliminate
all such exposures ... but to eliminate the risks associated with
all exposure of the information (in effect, armoring the transaction
w/o requiring the information to be hidden as countermeasure to
fraudulent transactions).

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