Beautiful Security

E-Commerce Redone: A New Security Model

By reviewing the current security model for e-commerce transactions, we now have a good feel for both its strengths and its weak points. Now I would like to propose a more elegant way to look at e-commerce security that renders the value of card account information useless to attackers and brings assurance to consumers.

When conducting a credit or debit transaction in a card-not-present use case, there are essentially seven base requirements that will ensure the transaction is secure while keeping the system usable for both consumers and merchants.

Requirement 1: The Consumer Must Be Authenticated

The first requirement is to authenticate consumers to ensure they are who they say they are. If consumer John is tied to credit account John123, we must first know this is indeed consumer John. So who is the best party and what is the best method to perform this authentication?

The best party is the manager of the cardholder’s account, which is the issuing bank in most cases. This is for several reasons: the issuer already has the information, so storing it with them does not add another point of failure to the system; also, they have the most resources to invest in the expertise and processes to do authentication properly; finally, there are much fewer issuers than there are other actors.

This authentication may be handled through a combination of any of the three classic factors of authentication:

• Something the consumer knows, such as a password.

• Something ...