This paper explores a reason why retailers pay such large merchant fees to credit card issuers. Credit cards as media of exchange are introduced to a New Monetarist model in which exchange occurs in alternating centralized and decentralized markets. Sellers who exert high (low) effort produce a good with a high (low) probability of being high quality. The quality of the good is revealed only af...

The use of trade credit as a short-term financing is increasing in the last years; large firms use more days to pay small firms than they need, which causes financial fatal consequences to suppliers. These financial problems are not new, but with the credit crunch they are coming up because the massive use of the trade credit impacts negatively on suppliers whose insolvency and bankruptcy risks...

From March 1998, the inter-bank settlement of most high value wholesale payments in New Zealand will occur on a real time gross settlement (RTGS) basis. This means that the interbank transfer of funds associated with each such payment will be posted to the exchange settlement accounts of the paying and receiving banks at the Reserve Bank, transaction by transaction, irrevocably and ahead of val...

Designing enhanced yet secure payment terminals is discussed in this application note. We expose the pitfalls that manufacturers face for PCI-PED PTS certification and explain how they can be addressed and solved by the use of two-chip architecture, based on the MAXQ1850. This article was also featured in Maxim's Financial Terminals Product Guide, 1st edition (PDF, 2.4MB). A similar version of ...

Contactless and contact smart card systems use the physical constraints of the communication channel to implicitly prove the proximity of a token. These systems, however, are potentially vulnerable to an attack where the attacker relays communication between the reader and a token. Relay attacks are not new but are often not considered a major threat, like eavesdropping or skimming attacks, eve...

In the U.S., the share of payments made “electronically” – with credit cards, debit cards and direct payments – grew from 25 percent in 1995 to over 50 percent in 2002 (BIS, 2004). This paper frames this aggregate change in the context of individual behavior. Family level data indicate that the share of families using or holding these instruments also increased over the same period. The persona...

The whole framework of the new generation campus smart card system based on the mobile communication is designed in this article, and it realizes two technical breakthroughs when it could remain compatible with the existing campus smart card system platform. The first technology is that the design could use the wireless POS based on GPRS network to substitute the wire POS to implement the onlin...

With the rise and swift growth of E-Commerce, credit card uses for online purchases has increased dramatically and it caused sudden outbreak in the credit card fraud. Fraud is one of the major ethical issues in the credit card industry. With both online as well as regular purchase, credit card becomes the most popular mode of payment with cases of fraud associated with it are also increasing. F...

Secure electronic payment instruments play an important role in retail electronic commerce. As in most countries, people in Taiwan often use credit cards for payments on Internet shopping. However, the information contained in the card includes sensitive data like card number, valid date, and CVC (Card Verification Code) which all easily suffer data leakage, or impersonation attacks. This may c...

Contactless smart cards are used in access control and payment systems. This paper illustrates an attack which effectively allows an attacker to ‘borrow’ the victim’s card for a short period without requiring physical access to the victim’s card. As a result the legitimate owner will remain unaware of the attack. We show that our hardware successfully executed a relay attack against an ISO 1444...