Cryptographically secured micro payment scheme

Abstract

As more and more commercial activity moves online and electronic com- merce becomes the common way by which transactions are conducted, elec- tronic payment systems will become a critical requirement for the success of many applications. The commonly used electronic payment scheme is to facil- itate the online transmission of payment card data from credit cards or debit cards and to process such transactions through a payment gateway. Also, other schemes such as PayPal or ezCash provide a service where the payment is processed online using identi cation data speci c to the service but using funds that are based on a pre-stored credit card, debit card or stored-value card system. All these existing online payment schemes are similar in their design and operation to credit card based payments. While such schemes called macro payment systems are appropriate for transactions with a relatively high value compared to the service charges of the online payment providers, there are many e-commerce applications that are being developed for which such credit card style payment schemes are inappropriate. As a solution to this problem, research has been conducted on an area called micro payment systems. The design of micro payment systems need to be radically di erent from the macro payment schemes as properties such as online real time availability of all participants, use of public cryptogra- phy schemes, availability of high computation power, etc that is common for macro payment systems are not desirable in micro payment systems. Taking into consideration the context in which micro payment schemes operate, where a transaction value is very low, micro payment systems need to be designed with a careful trade-o between reliability and cost of implementation. This proposed research is intended to study the properties of existing mi- cro payment systems, evaluate the strengths and weaknesses of those schemes, and prepare a model for a micro payment scheme with only the most essen- tial properties. The research further envisages the selection of cryptographic mechanisms and development of protocols to implement this micro payment model.