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Chip & PIN terminal playing Tetris
Fearful Bank Customer writes "When British banks introduced the Chip-and-Pin smartcard-based debit and credit card system three years ago, they assured the public it was impervious to fraud. However, the EMV protocol it's based on requires customers to type their bank account pin number into store terminals in order to make any purchase. Security researchers at the University of Cambridge Computer Laboratory derided the system as insecure at the time, as it gave access to customer's bank account pin numbers to every store they bought from. Despite these objections, the system was deployed, so researchers Steven Murdoch and Saar Drimer recently modified a straight-off-e-bay chip-and-pin terminal to play Tetris, with a video on YouTube, demonstrating that devices are neither tamper-resistant nor tamper-evident, and that even students with a spare weekend can take control of them. The banks are claiming that this can be reproduced only "in the laboratory" but seem to have missed the point: if customers have to type their bank account pin into every device they see, then the bad guys can capture both critical card information *and* the pin number for the bank account, leaving customers even more vulnerable than they were under the old system."
They got it to play tetris by replacing the majority of the electronics inside it. It's not exactly like they got the actual terminal to play tetris...it's more like "They put a tetris game console inside the empty terminal shell, and used the terminal's keypad and screen for control and display." It'd be like skinning a copy of Windows 95 to look like Xwindows, and then saying "Look at all the vulnerabilities I found in linux!"
For your security, this post has been encrypted with ROT-13, twice.
What annoyed me was the shift in liability. The old fashioned "swipe and sign" cards, if they were compromised and somebody nicked your cash then the banks could be held liable and some remittance sought. However - with the new system there is an automatic assumption that you have given your PIN away and hence its your fault and you can he held liable. So if somebody stands behind you, watches you type in your PIN and then follows you outside, mugs you and steals your card - then you can be held liable for not taking care of your PIN number. Also the system seems quite unreliable even now.
Instead of putting something in there that played Tetris, what if you put something in there that looked and felt like a normal C&P terminal, except instead of communicating to the bank, it just kept a copy of your card details and PIN for later extraction? That's the problem this demonstrates.
While your idea seems very well thought out, it still wouldn't gaurantee it couldn't be a dummy terminal that's designed to collect swipe data and pin codes.
My thoughts are that after you swipe your card, the terminal should give YOU a PIN number that should match a PIN that the bank sends you with your card. At this point, once you verify that it is indeed legit, you provide your counterpart PIN.
And since it doesn't have to be entered, it could be a word, or with LCDs, even an image.
Hell, for that matter, even an image of YOU would work (in fact, this would also have a good usage to prevent fraud in cases of CREDIT transaction (as opposed to the debit transactions that we're talking about)
I assume you were doing your best to avoid saying it outright?
I pay off my credit card balance every month, from a checking account that earns a modest interest rate (currently in the range 3.0-3.5% annually). So the 30 days of float I get means in effect that the bank is paying me roughly a 0.25% bonus for everything I charge.
With a debit card, the money is siphoned out of the account immediately at the point-of-sale. The attractiveness of this from the bank's point of view is obvious. It would also not surprise me if the Visa people ding merchants at a lower rate for debit than they do for credit.
A second major flaw is the fraud angle. If fraudulent charges show up on my credit card, I call my bank and refuse to pay the charges until the matter is settled. With a debit card, the money is gone, and I have to convince someone to give it back to me. Having the first sign of fraud be the fact that my checking account has been cleaned out is not a good feature, IMO.
Debit cards also lose out to ATM cards for the same reason. With an ATM card, there's a one-day limit of something like $300-$500. So if my pin or card gets compromised, there are limits to how much damage they can do. (Of course liability limits are much lower, and you should *eventually* get all of your money back, but again I don't want to start from the position of having my checking account cleaned out, and then trying to recover.)
If that's the case, then isn't the PIN alone rather useless to a crooked merchant? From what I understand, the chip on the card is supposed to be difficult or impossible to duplicate (especially in a tiny form factor card reader device). So even if you have the PIN, it's of no use to you unless you either mug the person for their card or hope they've used it elsewhere.
I read the internet for the articles.