e-Banking
Micropayments
MOHAMMAD ALI JINNAH UNIVERSITY
What is a Micropayment
• A payment scheme used exclusively on the Internet, normally for very small denominations (as low as a fraction of a cent). Used with pass-though transaction processing to quickly perform payment transfers for high volume, low cost soft goods. • Electronic payment for information or knowledge or services ranging from a few cents to a tenth of a cent.
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Origin and Goals
• Micropayments provide an alternative revenue source for content providers (initially of text and pictures, presumably multimedia later on) beyond advertising and subscriptions • Micropayments may also provide revenue streams for service providers (database lookup, proxy services etc.). • Most Micropayment systems also try to provide a simple user interface, especially making buying as easy as possible
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Origin and Goals
• Micropayment systems try to save costs, including financial risk-management costs, operational costs (including communication, processing, storage), and set-up costs.
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Principles and Parties
• Micropayments involve a buyer/customer C, a vendor/merchant M, and potentially one or more additional parties that keep accounts (usually called brokers [in Millicent], billing servers [in IBM Micropayments], intermediaries [in France Telecom Micropayments], etc.).
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Why Micro?
• Minimal transaction costs
– Pay cents or fractions – Purchase information (e.g., Internet pages)
• Business cases:
– 1/2 a cent per “hit” – Developer’s information at 10c per question – Want Ads for 25c each
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Approaches
• Use symmetric encryption
– Trust shops – Legal problems
• Non-repudiation requires digital signatures • Signatures are very expensive
– Requiring significant time for signature/verification
• Solution:
– Amortize signatures over multiple payments
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Architecture
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Micropayment layout
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Micropayments Technology Providers
• Cartio Micropayments • Clickshare • CyberCash: CyberCoin • DigiCash • E-Money • Enition • GC-Tech • Internet Dollar • Jalda • Micropayments Transfer Protocol MPTP • NetCheque University of Southern California • NTSys • NewGenPay MicroPayments • OpenMarket • Pay2See • PayWord and MicroMint by Rivest and Shamir • SOX from Systemics • Trivnet • The Ultimus Solution • Wave Systems Corp
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Advantages
• • • • • E-learning E-commerce E-Articles E-Book E-Journals
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Micro-systems
• Millicent (DEC)
– Symmetric encryption – Vendor-specific “scrip” – Brokers carry scrip for multiple shops
• Trust brokers and shops
• PayWord (Rivest, Shamir)
– Chain of hashed values
• First value randomly generated • Last value signed
– Users generate coins (credit based)
• User and Vendor specific
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Micro-systems
• NetCard (Anderson, Manifavas, Sutherland)
– Similar to PayWord (chain of hashes) – Bank generates coins (debit based)
• CAFÉ project’s (Pedersen)
– No similar to PayWord, but no details given
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Micro-systems
• iKP (Hauser, Steiner, Waidner)
– Chain of hashes as in PayWord – Top node validated with credit card
• Probably not suitable for payments down to one cent
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Micro-systems
• PayTree (Jutla, Yung)
– Tree of hashed values
• Leaves randomly generated---root signed • Vendor-independent • Allows exact payments
• MicroMint (Rivest, Shamir)
– A k-way hash function collision is a coin
• Minting requires resources that only the Bank has • Similar to paper cash: forgery requires a big investment
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References
http//www.w3.org/Ecommerce /Micropayments/
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