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Contactless Smart Cards and e-Commerce

E-commerce has generally been defined as the ability to search, order, purchase and pay for goods over the Internet.  But security remains a key stumbling block in its full acceptance. So-called Contactless Smart cards provide a solution.

“Contactless smart cards meet e-Commerce security needs by providing a safe method of transacting,” says Murton System Technologies MD Brent Maurer.  “The smart card industry has taken a step forward with the development of the Contactless smart card.”

The simple definition of a Contactless smart card is a computer and radio transponder with an encryption engine on a piece of plastic.  It has a microprocessor and memory, and although it does not have a keyboard and screen, it does have digital electronics to send and receive data.

The card fits into a wallet and looks just like a credit card, and can be colorfully branded, and being a computer, it can do a lot more than an ordinary credit card.

In contrast to ordinary credit and chip cards, Contactless smart cards have the ability to meet e-commerce security needs. Until now on-line sites simply request the credit card details, encrypt the data and send it off to the acquiring bank for credit authorization. 

However this results in a plethora of potential security problems. For example, how does the system know that the person giving in the credit card information is entitled to do so?  How does the user know that the merchant’s site isn’t an imposter pretending to be a merchant to gain access to credit card numbers or that the encryption mechanism has not been compromised?  Who pays if there is a problem and can the buyer deny buying goods? The list is endless.

As a potential solution to the credit card dilemma Master Card and Visa developed a protocol called SET (Secure Electronic Transactions) whose sole purpose is to answer these questions satisfactorily and to define a standard on which to build SET solutions.  But there are still major shortfalls from the buyer’s perspective.

“The SET protocol defines a requirement and protocol for everyone to be certified by a trusted third party, which solves the ‘can I trust this buyer’, or ‘can I trust this merchant, or even ‘can I trust this bank,’ question,” comments Maurer.  The proposed solution is for the buyer to download an ‘electronic wallet’ and ‘digital certificate’ from a bank or software vendor.  This certified wallet is then used to supply credit card details for purchases.

However, there are still numerous loopholes. “For one, the concept of a ‘digital certificate’ is so unfriendly, only advanced users will download it, resulting a large number of intermediate Internet users being excluded from buying over the Internet and also, it does not address the question 'can I trust the trusted party?'. Of even greater importance is the dreaded thought for many that regardless how secure they system is, they know their credit card information is whizzing around on a computer drive somewhere out there,” notes Maurer.

“Enter the smart card solution. Contactless smart cards provide a perfect solution,” says Maurer.  “An Internet user simply goes to an on-line store and swipes the Contactless card in a reader attached to a desktop PC. In the same way as you physically shop, choose the items and pay for them immediately. The MS Tech system ensures firstly that the user is biometrically identified eliminating unauthorized use, and secondly, the credit card information never leaves his computer making card information impossible since it is not there to begin with”

Paying for goods over the Internet in this manner is safer than paying by credit card.   In the physical world when using a credit card the merchant checks to see if the card is valid by comparing signatures and makes sure the user has enough money in the bank.  With a Contactless smart card the risks of fraud are dramatically reduced.

On-line shoppers will be required to enter either a pin number or be biometrically scanned. The card/pin or biometric scan combination verifies that the person using the system, and the card further provides for secure encryption to and from itself. 

“Security, identification and certification are all present on the Contactless smart cards,” notes Maurer, “and provide the most secure means of purchasing over the Internet to date.”

The Contactless smart card readers developed by Murton System Technologies using Philips Mifare technology is a global standard for Contactless smart cards to the world market.  The cards hold up to 15 different applications and transactions take place in less than 0,15 seconds.  Contactless smart cards differ from standard smart cards because they cannot be tampered with and can be read from a distance, eliminating the need to take them out of one's wallet.

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