Fair Trading Protocol with Offline Anonymous Credit Card Payment

Abstract

This paper proposes a fair trading protocol. The fair trading protocol provides an overall solution for a trading process with offline anonymous credit card payments.

With the exploding growth of electronic commerce on the Internet, the issue of fairness^1,2 is becoming increasingly more important. Fair exchange protocols have already been broadly used for applications such as electronic transactions,^3,4 electronic mails,^5,6and contract signing.⁷ Fairness is one of the critical issues in online transactions and related electronic payment systems. Many electronic payment systems have been proposed for providing different levels of security to financial transactions, such as iKP,⁸SET,⁹ NetBill,¹⁰ and NetCheque.¹¹ In a normal electronic commerce transaction, there is always a payer and a payee to exchange money for goods or services. At least one financial institution, normally a bank, should be present in the payment system. The financial institution plays the role of issuer for the payer and the role of acquirer for the payee. An electronic payment system must enable an honest payer to convince the payee of a legitimate payment and prevent a dishonest payer from using other unsuitable behavior. At the same time, some additional security requirements may be addressed based on the nature of trading processes and trust assumptions of the system. Payer, payee, and the financial institution have different interests and the trust between two parties should be as little as possible. In electronic commerce, the payment happens over an open network, such as the Internet, and the issue of fairness must be carefully addressed. There is no fairness for involved parties in the existing popular payment protocols. One target of this article is to address the fairness issue in the credit card payment process. In the existing credit card protocols, the financial institution that provides the credit card service plays the role of online authority and is actively involved in a payment. To avoid the involvement of financial institutions in normal transactions and to reduce running costs, some credit card-based schemes with offline financial authority have been proposed.¹² Another target of this article is to avoid the online financial institution for credit card service in normal transactions.