Cryptography Reference
In-Depth Information
in which cryptography is used in the financial sector by considering some of the
services offered by international payment card organisations.
12.4.1
Background to payment card services
A
payment card organisation
(PCO), such as Visa and MasterCard, essentially
operates as a 'club' of member banks who cooperate in order to facilitate
transactions. Figure 12.8 indicates the key players in this cooperative organisation.
Issuing banks
issue payment cards to customers.
Acquiring banks
have
relationships with merchants of goods. PCOs run networks that connects these
banks and facilitate payments from issuing bank customers to acquiring bank
merchants. The two main uses of a payment card network are to:
1. authorise payments;
2. arrange clearing and settlement of payments.
PCOs oversee the use of both credit and debit cards. The main difference between
the two is the process by which the issuing bank decides to bill the customer.
From a cryptographic perspective we will not distinguish between these two types
of payment card.
In this section we will look at a number of different uses of cryptography
with respect to payment cards. We begin by looking at the cryptographic security
relating tomagnetic stripe payment cards.We then consider the upgraded security
Payment Card Organisation
Issuing
bank
Acquiring
bank
Authorisation and
settlement
Payment
card
3306 4582 1984 3990
3306 4582 1984 3990
FC WALDO
FC WALDO
Payment
Merchant
Customer
Figure 12.8.
Payment card organisation infrastructure
