E-Cash & Mobile PaymentsKaren Uttecht

Overview• What is Money?• E-Cash (Ideal)

– History– Basic Concept– Technologies– Features– Trade-offs

• Real “Electronic Cash” Systems– Online Payment Systems– Peer to Peer Systems– Smart Cards– Mobile Payments (in detail)

What is Money?

Stone Money of Yap Island

Photo from [20]

History of E-Cash

• Invented by David Chaum in 1982 in his paper “Blind Signatures for Untraceable Payments”

• Chaum filed patents and founded DigiCash, Inc.

• Chaum’s mismanagement of DigiCash ultimately lead to Bankruptcy in 1998

• Hundreds of papers improving on Chaum’s E-Cash have been written since.

E-Cash: Basic Concept

Bank

Service ProviderPayer

2

3

1 4 5

1. Send Prepared E-Cash

2. Return Signed E-Cash

3. Give E-Cash

4. Check E-Cash Validity

5. Return Verification

Cryptographic TechnologyUsed By E-Cash Schemes• RSA / Public Key

Cryptography• Elliptic Curve Cryptography• Blind Signatures• Hash Functions• Digital Certificates

Ideal E-Cash:Security Requirements• Non-Reproducible• Can’t be Double Spent• Tamper-Proof• Private and Anonymous• Theft Resilient• Dispute Resolution

Ideal E-Cash:Usability Requirements• Fast• Easy to Use• Easy to Learn• Available• Accountable• Predictable Performance• Accurate

E-Cash: Trade-Offs and Challenges

• Double Spending vs. Availability• Double Spending vs. Anonymity• Dispute Resolution vs. Anonymity• Fair Trading

Real “Electronic Cash” Systems• Online Payment Systems• Peer to Peer Systems• Smart Cards• Mobile Payments

Online Payment Systems

• Users exchange money through their site• Money stays put (with the site), ownership

changes hands• Online Wallets, Shopping Carts & Checkout

through participating retailers• Mobile web payments• Examples: Paypal, WebMoney, Gogopay,

CashU

Peer to Peer Systems• No Central Authority• Coins are chains of digital signatures of all

previous owners

Diagram from [12]

Peer to Peer Systems• Double spending is prevented by announcing all

transactions to the network, majority of nodes decide which transaction came first

• Timestamps determined using longest proof-of-work chain

• Examples: BitCoin (Open Source)

Diagram from [12]

Smart Card Systems

• Essentially like a “Smart Card” Visa gift card• Anonymous – the user does not open an account• Cards are loaded up at kiosks• Many are transit cards retailers have chosen to

accept as payment• No theft protection• Examples: FeliCa System – Widely Used

– Notably extensively used in Hong Kong, Singapore, Japan, and Netherlands as E-Cash

Mobile Payments

• Exchanging money using Mobile Devices

• Four General Types– SMS– Direct Mobile Billing– Mobile Web Payments– Near Field Communications

Mobile Payments: SMS

• Payment Request Sent via Text Message

• Charge is added to Phone Bill• Very clunky• Unreliable• No Security – Messages are

plaintext

Mobile Payments:Direct Mobile Billing

• Essentially Charging Services to your Phone Bill

• Uses a pin code & one-time-password

• Prevalent in Asia• Bypasses banks & credit cards

Mobile Payments: Mobile Web Payments• Accessing a payment web service

on your mobile phone• Example: Paypal Mobile: https://

www.paypal.com/mobile

Mobile Payments: Near Field Communications• NFC is an extension of ISO/IEC

14443, RFID proximity card standard

• NFC device can communicate with existing infrastructure and other NFC devices

• Range of 7-8 inches• Low Power Consumption• Designed for Mobile Devices

NFC Mobile Payments

Pictures From Reference [11]

NFC Mobile Payments

• NFC embedded into mobile phone• Allows User to Pay with their Phone• E-Cash Schemes could be used in conjunction• Mobile to Mobile Payments Possible• “Offline” Payments Possible• Predicted: $75 Billion globally in NFC Mobile

Payments by 2013• 59% of US consumers want to make purchases with

their mobile phone

NFC Mobile Payment Systems

• Pay-Buy-Mobile Initiative– Working on World Wide Standard for NFC Mobile

Payments– Over 50 Mobile Operators involved

• Payforit – UK• Bling Nation – US – “Smart Sticker”• China Mobile• Blaze Mobile (US) – “Sticker Based”• Many trials worldwide

Questions?

References• [1] History of DigiCash http://jya.com/digicrash.htm• [2] E-Cash System Architecture http://rtds.cs.tamu.edu/aaa2.php• [3] Bitcoin http://www.bitcoin.org/• [4] Paypal www.paypal.org• [5] WebMoney www.wmtransfer.com• [6] CashU www.cashu.com • [6] Liberty Reserve www.libertyreserve.com/en/• [7] Wikipedia: Mobile Payments http

://en.wikipedia.org/wiki/Mobile_payment• [8] Wikipedia: Near Field Communications http

://en.wikipedia.org/wiki/Near_Field_Communication • [9] NFC Mobile Payments to Reach US$75 Billion by 2013 http://

www.paymentsnews.com/2008/07/nfc-mobile-paym.html•

References• [10] Architecture and Development of NFC Applications

http://www.slideshare.net/tdelazzari/architecture-and-development-of-nfc-applications

• [11] NFC: Payment and Beyond http://www.nfc-forum.org/resources/presentations/Tagawa_Barcelona_2010.pdf

• [12] Bit Coin: A Peer-To-Peer Electronic Cash System http://www.bitcoin.org/bitcoin.pdf

• [13] Pay-Buy-Mobile Initiative http://gsmworld.com/our-work/mobile_lifestyle/mobile_money/pay_buy_mobile/index.htm#nav-

• [14] Pay-for-it http://www.payforit.org/• [15] Bling Nation http://www.blingnation.com/• [16] Near Field Communications World Payments News http

://www.nearfieldcommunicationsworld.com/category/applications/payments/

References• [17] NFC Trials and Rollouts worldwide

http://www.nearfieldcommunicationsworld.com/list-of-nfc-trials-pilots-tests-and-commercial-services-around-the-world/

• [18] Blaze Mobile http://www.blazemobile.com/ • [19] Newswire: Consumers want to use their phones to make purchases at

the point of sale http://www.nearfieldcommunicationsworld.com/2009/12/01/32406/59-of-consumers-want-to-use-their-phone-to-make-purchases-at-the-point-of-sale/

• [20] Yap Island Sights http://www.visit-fsm.org/yap/sights.html • [21] “What is Money?” Ray Byler• [22] “mFerio: the design and evaluation of a peer-to-peer mobile payment

system” Balan, Rajesh Krishna and Ramasubbu, Narayan and Prakobphol, Komsit and Christin, Nicolas and Hong, Jason