Re: Don't Let Data Theft Happen to You

> When paying with a credit card, the server brings a small wireless
>> terminal directly to the table. It looks just like a compact adding >> machine, with a paper roll on the back, but with a card slot on the >> front, where you insert your card. If it's a debit card, you key your >> PIN on the keypad. The receipts are printed right from the same >> device, and the card never leaves your possession. >> If devices like this were used in the states, you could presumably >> also use the keypad to add a tip amount to the check. (In France, >> where service is included, tips are a rarity, and when offered at all >> are invariably in cash.) > I would worry about the security of the wireless connection.

One would hope that such devices *could not operate* unless there was a secure connection.

I have more fundamental concerns: what would prevent the creation of a validation device that was completely functional but managed to copy and transmit the credit card information? What would keep an unscrupulous restraunt manager or waiter from substituting such a device? For that matter, what would keep an unscrupulous customer from swapping a trojan horse wireless validater widget while the waiter wasn't looking?

AFAICT, any system which counts on the secrecy of a number is simply problematic today. Challenge/response systems are the only way to go:

The vendor sends the details of the transaction: your credit card number (which is no longer sacrosanct), the vendor's account number, and the amount of the transaction. Optionally, there could be a customer-supplied number shipped up for the customer's own tracking of transactions. These are sent to a centralized validation authority.
The validation authority issues a challenge code for this transaction.
The customer enters the code in their personal validation card which generates the response code. The customer manually enters the validation code; the vendor relays the validation code to the centralized authority and the transaction is validated.

The personal validation card would be protected with a PIN and biometrics.

AFAICT, having such a system would eliminate a massive amount of fraud. Besides using the card for validating transactions, any alteration of my credit information: applying for a new "credit card", change of address, etc. would require exactly the same validation.

Jim Rusling

--phil