Secure Payment Networks

4/23/2020/Dr. Hermann
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 Contents Lecture 2020
• Introduction
• Structure of Banks and Saving Banks
• Structure of networks and payment schemes
• Stakeholders
• Secure Authentication methods
– Two-Factor Authentication
– Biometrics
– Encryption/PKI/Digital Signatur
• Protocols for Self Service Systems
• Networks Attacks
• Secure Server and Cloud Solutions
• Distributed Ledger Technologies
• Payment Methods and Application
• Digital Currencies
• Standardisation and Certification

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 1 ) Structure of banking system,
Structure of Finanzial Institutes
Central Bank

In our world we are used to a decentralized banking Privat Banks Saving Banks State Banks
structure. Starting from the central bank with
Branches Branches Branches Branches
intermediates the commercial banks. Commercial Branches Branches
Branches Branches Branches Branches
Banks are the interface to the customers (end user). Branches Branches Branches Branches Branches
Branches Branches
Centralized would mean that the Central Banks are Branches Branches Branches
connected directly with end users.

Bank Branch Self Service

Bank and Saving Bank branches are normaly

structured in the area of Self Service and Info and
Service center.
Additional to that the IT-Center including all IT
infrastructure and Internet and Homebanking
application.

Info and Service

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 2) Payment Process
2.1 Debit Card Payment Process
Merchant Bank
Issuer Bank

Authentication is done by Issuer Bank 3

Payment risk is managed at Issuer bank Processor can handle
the secure
Processor communication
between Merchant
and Merchant Bank
2

Merchant
Customer/User
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 2) Payment Process
2.2 Credit Card Payment Process
Merchant Bank
Issuer Bank
Credit Card
Issuer
4

Authentication is done by Credit Card Issuer 3

Payment risk is managed at Credit Dard Issuer Processor can handle
the secure
Processor communication
between Merchant
and Merchant Bank
2

Merchant
Customer/User
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 2) Payment Process
2.3 Debit/Credit Card Payment Process with Trusted Service Provider
Merchant Bank
Issuer Bank
Credit Card
Issuer
4
3

Trusted
Service
2
Provider (TSP)
4
Authentication is done by TSP
Payment risk is managed at TSP

Merchant
Customer/User
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 Payment schemes
• Debit payment
• Credit payment
• Payment via Trusted Service Provider
• Payment with NFC
– Smartphones as „beeing card“
– Smartphone as „beeing reader“
• Change of the process; dataflow from merchant to user
not from user to merchant. => cash in transaction from
user not cash out transaction from merchant

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 Payment „card“ types
• Magnetic stripe card
– Strip 3 for debit
– Strip 2 for credit
• Chip cards
– EMV (Europay, Mastercard, Visa)cards
– Contact and contactless cards
• Smartphone/Token

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 Encrypted PIN Pad (EPP)
• Keypad certified for payment process
• HW and SW security for chip
• Closed and alarm protected cover
• Interface Connection encrypted Personal
Authentication Code (PAC)

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 Digital Payment Process Advantages

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 Video Links

How Credit Card Processing Works - Transaction Cycle & 2

Pricing Models - Dauer: 8:10
How Credit Card Processing Works :
http://www.bancardsales.com

4/23/2020/Dr. Hermann
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