[email protected] (Martin Packer) writes:
> Ah Chip & PIN at last.

there was a large pilot deployment in the US around the turn of the
century ... however it was in the "YES CARD" period ... the issue was it
was possible to use the same skimming exploits to collect information
for counterfeit magstripe card ... for making counterfeit chipcards.

Gov. LEOs did a description of "YES CARD" cases at an ATM Integrity
TaskForce meeting ... prompting somebody in the audience to exclaim that
they managed to spend billions of dollars to prove that chipcards are
less secure than magstripe.

In the wake of that, all evidence of the pilot evaporated w/o a trace
and speculation was that it would be a long time while things were tried
in the US again (waiting for more glitches to be worked out in other
jurisdictions).

The problem was 1) it was as easy to make counterfeit chipcards as
magstipe and 2) they had moved business rules out into the chip.  A
chipcard terminal would ask the chip 1) was the correct PIN entered, 2)
should the transaction be done offline, 3) is the transaction within the
credit limit. A counterfeit "YES CARD" would answer "YES" to all three,
so didn't need to know the correct PIN and didn't need to do online
check with backend (and all transaction are approved). Traditional
countermeasure for counterfeit magstripe card is to deactivate the
account at the backend ... but that doesn't work with "YES CARD"

I had warned the people doing the pilot about the problems, but they
went ahead and did it anyway (they were myopically focused on
lost/stolen cards and ignored the counterfeit "YES CARD" scenarios).

Reference to "YES CARD" presentation at the bottom of this CARTES2002
trip report (gone 404, but lives on at the wayback machine)
http://web.archive.org/web/20030417083810/http://www.smartcard.co.uk/resources/articles/cartes2002.html

disclaimer: in the mid/late 90s, I was asked to do a protocol&chip that
had no such vulnerabilities and was significantly more secure ... then
the transit industry also requested that it could also run contactless
within the power&time constraints of transit turnstyle (w/o any
reduction in security&integrity) ... have you seen how long these
transactions take? ... even when they are getting full contact power.

-- 
virtualization experience starting Jan1968, online at home since Mar1970

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