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The Foundational Relation between PKI and EMV Payment Cards, explained!

By eMudhra Editorial on February 21, 2023
The Foundational Relation between PKI and EMV Payment Cards, explained!

What is EMV?

EMV stands for Europay, Mastercard, and Visa, which are the companies that originally created the EMV standard for payment cards. An EMV card is a payment card that contains a computer chip that encrypts the information used for transactions, making it more secure than traditional magnetic stripe cards.

EMV cards are also known as chip cards or smart cards, and they are designed to combat card fraud by making it more difficult for criminals to clone cards. When an EMV card is used for a transaction, the chip generates a unique code for each transaction, which is encrypted and can only be used once. This means that even if a criminal intercepts the code, they won't be able to use it again to make another purchase.

In addition to the chip, EMV cards may also require a PIN or a signature to verify the cardholder's identity. The combination of the chip and the PIN or signature provides an additional layer of security for transactions.

EMV cards are widely used around the world, and many countries have made the transition from magnetic stripe cards to EMV cards in recent years. If you have an EMV card, you may notice that you have to insert the card into a card reader rather than swiping it, and you may be prompted to enter a PIN or sign for the transaction.

What PKI standard is required for EMV payment cards?

PKI plays an important role in EMV-based cards, as it provides a framework for generating, distributing, and verifying digital certificates that are used to authenticate the card, the cardholder, and the payment terminal.

In the context of EMV-based cards, PKI is used to ensure the integrity of the transaction and protect against fraud. Each EMV-based card is issued with a unique digital certificate that contains information such as the cardholder's name, the card expiration date, and the card's public key. When a cardholder uses the card to make a payment, the payment terminal uses PKI to verify the card's digital certificate and ensure that it has not been tampered with or forged.

The payment terminal also has its own digital certificate, which is used to authenticate the terminal to the card and ensure that it is authorized to process the transaction. The terminal's digital certificate is issued by a trusted third party, such as a payment processor, which is responsible for verifying the identity of the terminal and ensuring that it complies with the EMV standard.

Overall, the PKI standard is an essential component of the security infrastructure of EMV-based cards, providing a reliable and robust mechanism for verifying the identity of the card, the cardholder, and the payment terminal and protecting against fraud and unauthorized access.

What are the PCI DSS requirements for EMV Cards?

The PCI DSS (Payment Card Industry Data Security Standard) is a set of security requirements designed to protect payment card data from fraud and theft. It applies to all organizations that accept credit and debit card payments, including merchants, processors, and service providers.

While the EMV standard provides robust security features for payment cards, PCI DSS requirements are still necessary to protect against other types of attacks and vulnerabilities. Some of the PCI DSS requirements that are relevant to EMV-based cards include:

  • Encryption of cardholder data - EMV-based cards use chip technology to encrypt the cardholder data during a transaction. However, the PCI DSS also requires that cardholder data be encrypted during storage and transmission.
  • Protection of cardholder data - PCI DSS requires that merchants and service providers implement security measures such as firewalls, antivirus software, and intrusion detection systems to protect against unauthorized access to cardholder data.
  • Secure transmission of data - The PCI DSS requires that all transmission of cardholder data be done over secure networks using encryption and other security protocols.
  • Secure storage of data - Cardholder data must be stored securely and protected from unauthorized access. Merchants and service providers must implement access controls and other security measures to ensure that only authorized personnel have access to cardholder data.
  • Regular testing of security controls - Merchants and service providers must regularly test their security controls to ensure that they are working effectively and to identify any vulnerabilities that may exist.

By complying with the PCI DSS requirements, merchants and service providers can help ensure that their systems are secure and that cardholder data is protected, even in the event of a security breach. This, in turn, helps maintain consumer trust in the security of the payment card ecosystem.

What are the key benefits of EMV cards?

EMV cards provide several key benefits compared to traditional magnetic stripe cards:

  • Enhanced security: EMV cards use a microprocessor chip to store and process data, rather than the magnetic stripe on traditional cards. This makes them much more difficult to clone, and helps protect against fraud from counterfeit cards and skimming attacks.
  • Global interoperability: EMV is a global standard for secure payments, which means that EMV cards are accepted by merchants around the world. This makes it easier for travelers to use their cards while abroad, without worrying about compatibility issues.
  • Reduced liability: In the past, if a fraudulent transaction occurred on a card, the liability for the loss typically fell on the issuer of the card. With EMV cards, however, liability shifts to the party with the least secure technology. This means that if a merchant hasn't upgraded to EMV-compliant payment terminals, they may be held liable for any fraudulent transactions that occur.
  • Support for additional features: Because EMV cards use a microprocessor chip, they can support additional features beyond basic payment processing. For example, some EMV cards support contactless payments, mobile payments, and other value-added services.

Overall, the increased security and global interoperability of EMV cards make them a valuable investment for both card issuers and merchants, helping to protect against fraud and provide a more convenient payment experience for customers.

Offline Pin Verification and Data Authentication: How PKI Plays a Critical Role

Offline PIN verification is the process of verifying the personal identification number (PIN) of the cardholder without requiring online communication with the issuer's system. This is done to ensure that the transaction can be completed even when the card is used in an environment where there is no network connectivity.

In EMV cards, offline PIN verification is performed using a symmetric key algorithm, where the PIN is encrypted using a secret key stored on the card, and the encrypted PIN is compared with the value stored on the card. To ensure that the card and the terminal share the same secret key for PIN verification, the key is distributed securely using PKI technology during the personalization process.

Offline data authentication is the process of verifying the authenticity of the card during a transaction without requiring online communication with the issuer's system. This is done to prevent the use of counterfeit or cloned cards.

In EMV cards, offline data authentication is performed using a combination of digital signatures and symmetric key algorithms. The card's chip contains a digital certificate that is used to verify the authenticity of the card. During a transaction, the card generates a cryptogram that is based on the transaction data and a secret key stored on the card. The cryptogram is signed using the card's private key, and the signature is verified using the card's public key. This ensures that the data transmitted during the transaction is authentic and has not been tampered with.

PKI technology is used to manage the digital certificates used in both offline PIN verification and offline data authentication. The card's digital certificate is issued by the issuer's certificate authority (CA) and is used to verify the authenticity of the card during a transaction. The terminal's digital certificate is issued by the acquirer's CA and is used to verify the authenticity of the terminal during a transaction. The use of PKI technology in EMV cards ensures that the offline PIN verification and offline data authentication processes are secure and reliable.

In conclusion, PKI is a critical component of the security infrastructure for EMV payment cards. By using PKI, issuers can provide strong authentication and encryption for the sensitive data that is transmitted during a transaction. This helps to prevent fraud and protect against unauthorized access to the cardholder's information. Furthermore, PKI provides a way to securely manage digital certificates, which are an essential part of the EMV transaction process.

Although implementing PKI can be complex and requires a significant investment in infrastructure and training, the benefits are well worth the effort. With the added layer of security that PKI provides, consumers and merchants can have greater confidence in the safety and integrity of their payment transactions.

As the use of EMV payment cards continues to grow, it's clear that PKI will play an increasingly important role in securing these transactions. By adopting PKI technology, issuers can help ensure that their cardholders are protected against fraud and other security threats, while also enhancing the overall user experience.

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