CAFE Project : final report

[MAS E-0302] This is the final public report of the CAFE project (ESPRIT 7023). CAFE developed a secure conditional access architecture and implemented a multi-currency electronic purse system based on smart cards and infrared wallets. The electronic purse was tested in user trials at the European Commission premises in Brussels. Part~I of the report covers background surveys, a simplified functional description of the system, and the operation and results of the user trials. Part II describes in detail the security architecture and the technical protocols developed by the project

Model-based Security Testing Using UMLsec A Case Study

AbstractDesigning and implementing security-critical systems correctly is very difficult. In practice, most vulnerabilities arise from bugs in implementations. We present work towards systematic specification-based testing of security-critical systems based on UMLsec models. We show how to systematically generate test sequences for security properties based on the model that can be used to test the implementation for vulnerabilities. We explain our method at the example of a part of the Common Electronic Purse Specifications (CEPS), a candidate for an international electronic purse standard

Retrenching the Purse: Finite Exception Logs, and Validating the Small

The Mondex Electronic Purse is an outstanding example of industrial scale formal refinement, and was the first verification to achieve ITSEC level E6 certification. A formal abstract model and a formal concrete model were developed, and a formal refinement was hand-proved between them. Nevertheless, certain requirements issues were set beyond the scope of the formal development, or handled in an unnatural manner. The retrenchment Tower Pattern is used to address one such issue in detail: the finiteness of the purse log (which records unsuccessful transactions). A retrenchment is constructed from the lowest level model of the purse system to a model in which logs are finite, and is then lifted to create two refinement developments of the purse, working at different levels of detail, and connected via retrenchments, forming the tower. The tower development is appropriately validated, vindicating the design used

The SECURE collaboration model

The SECURE project has shown how trust can be made computationally tractable while retaining a reasonable connection with human and social notions of trust. SECURE has produced a well-founded theory of trust that has been tested and refined through use in real software such as collaborative spam filtering and electronic purse. The software comprises the SECURE kernel with extensions for policy specification by application developers. It has yet to be applied to large-scale, multi-domain distributed systems taking different application contexts into account. The project has not considered privacy in evidence distribution, a crucial issue for many application domains, including public services such as healthcare and police. The SECURE collaboration model has similarities with the trust domain concept, embodying the interaction set of a principal, but SECURE is primarily concerned with pseudonymous entities rather than domain-structured systems

Electronic wallet development determinants:Theoretical and empirical analysis: Moneo in France

This work exposes the nature of electronic money and analyses the development potential of the French experience Moneo. Our study shows the unsufficient capacity of the model itself to reach 500 million transactions, seen as a mature market.Electronic money, electronic purse, France

Costs, advantages and drawbacks of the various means of payment

The total macroeconomic costs of the payment instruments used in the points of sale can be estimated to be 2.034 million euros, or 0.74 p.c. of Belgian GDP in 2003. The payment costs arising from cash were 0.58 p.c. of GDP, compared to 0.11 p.c. for debit cards, 0.04 p.c. for credit cards and 0.02 p.c. for the electronic purse Proton. About 50.5 p.c. of the payment costs originate in points of sale, whilst 47.1 p.c. come from the financial sector and 2.3 p.c. from currency-issuing institutions. If the costs of payment instruments are confronted to the transactions carried out, it can be seen that the costs per transaction are similar for three instruments. Costs are lowest for cash, at about 53 eurocents, but this instrument is closely followed by Proton (54 eurocents) and debit cards (55 eurocents). For credit cards, the costs are noticeably higher (2.62 euros). The costs per euro of turnover show that debit cards are the least expensive (1 eurocent), whilst cash, credit cards (at 3 eurocents in both cases), and especially Proton (10 eurocents), generate higher costs. These differences in costs, though, do not give any indication of the savings which could be made by replacing payment instruments with high variable costs with other instruments offering lower ones. The composition of the costs differs significantly between the different payment methods studied. Electronic payment costs are essentially fixed in nature : a significant part of these costs is linked to the infrastructure required for carrying out electronic transactions. The percentage is highest for Proton, with total fixed costs of 83 p.c. Next come credit cards (75 p.c.) and debit cards (61 p.c.). The cost breakdown for cash is far more balanced : 49 p.c. for fixed costs and 51 p.c. for variable costs (25 p.c. depending on the number of transactions and 26 p.c. on the amounts transacted). Variable costs per additional transaction are lowest for electronic purses, followed by cash, then debit cards and credit cards. Variable costs by additional euro of turnover are the highest for cash, since variable costs per transaction increase markedly according to the amount to be paid. In Belgium debit cards do not entail variable costs per additional euro of turnover and therefore give a level development for variable costs in relation to turnover. Essentially, variable costs for cash and debit cards are identical for a transaction of 10.24 euros ; it is better to pay smaller amounts in cash and higher amounts using a debit card. Moreover, it should be pointed out that the costs for using Proton are always lower than those for using cash but as soon as the sum to be paid reaches 53.74 euros, Proton becomes more expensive than using a debit card. It is possible to quantify a possible efficiency improvement in the use of payment instruments through a simulation. In order to do this, an analysis was carried out of the hypothetical replacement of 750 million transactions settled in cash by 250 million transactions (of an average 5 euros) paid by using Proton, and 500 million (of an average of 20 euros) using a debit card. The finding was that the saving would be about 58 million euros or 0.02 p.c. of GDP. Such a saving is rather low, even if a comparison is made at overall cost level (0.74 p.c. of GDP). Only a shift to a cashless society could generate substantial savings. This is, however, a purely theoretical scenario. As its market share shows, cash continues to be the public’s firm favourite : cash transactions make up 81.3 p.c. of point of sale operations. Cash does have intrinsic advantages ; it continues to be the only payment instrument which is universally accepted, basically because of its legal tender status, but also because its use does not require a terminal. Moreover, it can be used for operations between private individuals. Cash guarantees confidentiality in transactions and offers complete security in terms of protecting the private sphere of life. In addition, its use is unlikely to lead to building up excessive debts and lastly, it can also be a factor in social integration. Consumers should be able to continue to choose the payment methods they wish to use freely. Diversifying them contributes to greater flexibility for settling transactions and is therefore socially justified. In the future, efforts to make payment instruments more useful and more efficient will obviously have to be made. The spontaneous development of payments is already on the right lines, given the constant advances made in the area of electronic payments.banknote, cash, credit card, payment card

A COMPARISON OF THE MOST POPULAR ELECTRONIC MICROPAYMENT SYSTEMS

The buying and selling of products or services over electronic systems such as the Internet and other computer networks is known as electronic commerce. In order to reduce the costs of electronic transactions, when one exchanges cheaper goods and services, specific payment protocols must be used. These protocols are actually the foundation for electronic micropayments, which implement simplified and cheaper schemes intended for small value transactions. In this paper we shall present and compare the main characteristics of the most popular micropayment systems used in both face-to-face and remote commerce.e-commerce, micropayment, security, encryption, Chipper, GeldKarte, Mondex, Proton, First Virtual, NetBill, KLELine, Odysseo, MicroMint

The Dutch Banking Chipcard Game

The banks in the Dutch chipcard market initially agreed on one chipcard system. One system is attractive for companies as well as consumers. Companies, banks and retailers, prevent costs of duplication, while consumers enjoy the benefits of a widespread acceptance of one card and do not face uncertainty regarding the chipcard standard. Two standards could harm the development of the chipcard market. However, one bank withdrew from the initial agreement and introduced its own chipcard system in December 1995. This has resulted in a costly battle between the two banking chipcard standards, duplication costs for retailers, the introduction of a gateway technology in order to establish compatibility for users, and low market acceptance of the chipcards. March 2001, after a struggle of more than five years, the banks decided to return to one chipcard. The rationality of the decision to withdraw, despite the prospect that everybody may be worse off, will be analyzed from the perspective of game theory and the theory regarding standards battles.standardization;Banking;chipcard;electronic purse;game theory

Money Laundering: Some Facts

The term "Money Laundering" originates from the US describing the Mafia's attempt to "launder" illegal money via cash-intensive washing salons, which where controlled by company acquisitions or business formations. Estimated two to five per cent of the global gross domestic product stems from illicit sources. A great deal of the money derives from drug-dealing, with a total revenue of 810 Billion USD in 2003. In 2005 the Austrian Police secured drugs worth 49266800 Euro (drug seizures in terms of street prices), in total 25.892 persons were charged for violation of the Austrian Narcotics Act. Most of all illegal transactions are processed by cash since there is the smallest risk to leave one's mark; nevertheless there exists an obvious tendency to misuse the internet in order to undertake illicit transactions in form of Online- Banking, Cyber money and Electronic Purse.

Dematerialized Monies – New Means of Payment

In this paper, we will outline the financial context in which the main means of payment dematerialization occurs. We will present the main characteristics of these new types of dematerialized monies: electronic money, virtual money, digital money, private money, purses and holders.means of payment, dematerialized monies: electronic, virtual, digital, private, purses and holders.