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A Framework For SmartCard Payment Systems - Part One By Mark Merkow, CCP, CISSP June 22, 2000 As we continue the series on alternative payment systems, we now turn the attention to SmartCard-based systems like e-purses (e.g. MONDEX, Visa Cash, etc.) and credit and debit card applications such as the Europay, Mastercard, and Visa (EMV) standard. As we did with reviews of alternative systems that are based on the Secure Electronic Transaction (SET) protocol, we''ll start by building a foundation for understanding SmartCards before we begin reviewing specific application software that requires them. This column, the first in a series of three, will help you understand the technology -- and challenges -- associated with the uses of SmartCards for banking applications. SmartCards are complex devices that are best viewed as a series of layers or abstractions. In this first column of the series, we focus on introducing SmartCards, looking at them from the physical perspective, and seeing how they''re used. Just What Are SmartCards? SmartCards are actually a fully functioning computer system built on a single chip (integrated circuit). This computer system has important similarities and differences from other kinds of traditional computers. Like others, it has a central processing unit (CPU) and various kinds of memory. Unlike others, since cost is a major constraint, these computers are sold for a few dollars rather than the hundreds of dollars other computer chips sell for. The chips must also be small as possible to meet the form-factor requirements of bank card applications (ATMs, Point of Sale devices, etc.) SmartCard Memory SmartCards use several types of memory, all implemented within a single chip. These are: Permanent memory Programmable nonvolatile memory Volatile memory Permanent memory is generally ROM (Read Only Memory), placed in the chip hardware at manufacturing time. It can not be changed, although its operation can be blocked through logic operations. Programmable nonvolatile memory is generally EEPROM (Electrically Erasable Programmable Read Only Memory). It can be programmed after chip manufacture, exposing both its strength and its weakness. E-squared (as it''s affectionately called) permits making changes to programs, increasing the SmartCard''s flexibility but also exposing it to various types of nasty security attacks. Volatile memory is generally RAM (Random Access Memory), used as a temporary storage area for interim operations. It loses its contents when power is removed from the chip. SmartCard programming requires special skills since programs must be written using the smallest amount of memory possible. One major factor in understanding SmartCards is realizing the implications of when a program is added to what type of memory. If a program is added in ROM, it must be added when the basic chip is manufactured, and no changes can be made to it. If programs are added to EEPROM, they can be added both prior to issuance of the card or afterwards. SmartCard Processing Power Most SmartCards today use 8-bit microprocessors. Although more powerful 16- and even 32-bit chips will be available soon, none have multi-threading and other powerful features that are common in standard computers. Memory sizes range from as little as 1K of programmable non-volatile memory to as much as 24K, with larger memory chips coming soon. ROM size is similarly limited. However large memory may become, the total amount will always be relatively limited compared to normal computer capabilities. That imposes the requirement of strict discipline in coding and limits the defensive measures that can be implemented. Chip Families A chip family has a single CPU with many different memory configurations. This is to accommodate programs of varying sizes and states of maturity. The smallest chip in the family may have 4 K of ROM, 256 bits of RAM, and 1 K of EEPROM. The next size up may have the same ROM and RAM, but varying amounts of EEPROM - 2K or 4 K, for example. The next members of the family may have 6 K of ROM, 256 bits of RAM, and 6, 8, or 10 K of EEPROM. Another possibility is 8 K ROM and 4 or 6 K of EEPROM. A cryptographic co-processor may also be added for those applications that require faster execution of cryptographic algorithms, sometimes with some additional dedicated RAM. Soft Mask and Hard Mask Cards SmartCard industry experts refer to SmartCards as being either soft mask or hard mask. Masking refers to where an application program is placed. If the application is placed in EEPROM, it is termed a soft mask card. If most of the application is placed in ROM, it is called a hard mask card, though variable features and personalization data will still be placed in EEPROM. Banks commonly use a soft mask card for pilot testing new applications and then to move on to hard mask cards for larger deployments. However, some applications have limited deployments that are never taken to hard mask, as hard masking is expensive in both time and money. Hard masks also may not be justified for some applications, such as an employee identification card for small companies. Differentiating cards into soft or hard masks works well for single application cards, but is often confusing when there are multiple applications on the same chip. That is, a single card may have one application in ROM and thus be considered a hard mask card with respect to that application, but also have another application placed in EEPROM, and so it may be a soft mask card with respect to that application. Programming Languages Most SmartCards are currently programmed in low-level languages based on proprietary SmartCard operating systems. Some of the programming has been done in the chip''s native instruction set (generally Motorola 6805, Intel 8051, or Hitachi H8). This results in highly efficient code but it is much more difficult to program than higher level languages. The number of programmers who could do this type of programming is quite limited. In 2000, a new type of card has shown up, sometimes called a re-configurable card. These re-configurable SmartCards have a more robust operating system that permits the addition or deletion of application code after the card is issued. Such cards are generally programmed in Java, Windows for SmartCards, or MEL (the Multos programming language). These cards may have a card operating system and additional layers which offer industry or application specific features. The operating system must ensure that only authorized applications can be added after the card is issued to the cardholder and that deletions of applications are only done under proper authorization. These re-configurable cards use programming languages that are very well known in the software community, which is one of their advantages. Many programmers will be able to write SmartCard programs that will run on these operating systems, although the special skill of being able to write very memory efficient programs will be needed. Application Software For SmartCards Typical applications for SmartCards today include: Financial - Payment schemes may include credit, debit, stored value purse, stored token, or mass transit (generally dedicated to a single transport system and typically having low value). Telephony - The primary use is the Subscriber Identification Module (SIM) for digital mobile telephones. Identification - Various public and private schemes provide identification credentials to participants. These may be government, corporate, university, or other entities. The identification credentials are typically associated with various rights and duties, defined by the identification provider. These can include membership, driver''s licenses, benefit access, passports, national identification, etc. Typically the identification credentials havevalue in great part because they can not be altered easily by the credential holder, and assets in the credential must be protected against alteration by the cardholder. Digital certificates used in public key systems fit in to this category. Secure information storage - Information that is useful to store in a secure fashion includes health records, health insurance, and other medical type information. Loyalty - These are programs like the frequent flyer points awarded by airlines. Points are added and deleted from the card memory in accordance with program rules. The total value of these points may be quite high and they must be protected against improper alteration in much the same way that currency value is protected. Networked applications - SmartCards can hold access credentials such as passwords that authenticate a user to a computer network. Each of these applications may have somewhat differing security requirements, security features, roles, and environmental considerations (e.g., whether they''re used always on-line, always used off-line, usually off-line with the capability of going on-line, etc.). The security requirements for the operating soft-ware, applications, and the procedures for adding or deleting those applications must therefore clearly be identified and the security functions that are present must be appropriate to the type and intended use of the card. Applications may range from very simple to very complex. For example, a loyalty application may be no more than an identifying code, such as a hotel or airline frequent user account code. Most of the information (preferences, total points, etc.) is stored on a mainframe computer somewhere; the card is only used to access the account accurately. The application becomes more complex as more of the information and processing is moved from the computer(s) on the network to the card, which may be desired so that activity can take place off line. Payment applications are often complex, since one of the main reasons for moving from magnetic stripe only uses to SmartCards permits off line transactions to be conducted more securely. In the next installment of the series we''ll examine SmartCards from the perspective of their life cycle -- from pre-personalization to disposal -- where functionality and security concerns constantly mutate. Mark Merkow is an E-commerce Security Specialist and technology author. His books include Building SET Applications for Secure Transactions, Thin Clients Clearly Explained, and Virtual Private Networks for Dummies. His latest book, The Complete Guide To Internet Security comes out in June 2000. Mark can be reached at mmerkow@internet.com