The document describes a Privacy Enhanced Electronic Cheque System (PEEC) that aims to address privacy issues with existing electronic cheque systems. PEEC allows for anonymous payments using electronic cheques while working within existing legal and financial infrastructure. It consists of setup, registration, payment, and deposit protocols that incorporate public key cryptography and digital signatures to provide authentication and non-repudiation without revealing payer identities. The system aims to provide security against forgery while enhancing privacy for user information and transactions through its anonymous identity scheme.

1. Privacy Enhanced
Electronic Cheque System
(PEEC)
Vijayakrishnan. P
with
Prof. Josef Pieprzyk and Dr. Hua Xiong Wang
krishnan@ics.mq.edu.au
Centre for Advanced Computing - Algorithms and Cryptography
DepartmentPrivacy Enhanced Electronic Cheque System – p.1/19
of Computing,
CEC2005,July2005

2. Contents
Electronic cheques
Related Work
FSTC’s eCheck
Issues in FSTC’s eCheck
Privacy Enhanced E-cheque(PEEC)
Characteristics of PEEC
CEC2005,July2005
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3. Electronic Cheques An overview
- Typically, E-cheques mirror Paper cheques
- A payment type for high value transactions
- Post-pay method of payment
CEC2005,July2005
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4. Electronic Cheques An overview
- Typically, E-cheques mirror Paper cheques
- A payment type for high value transactions
- Post-pay method of payment
Advantages
- Extra Services anonymity, unlinkability
- Multiple account draws and deposits
- Supports multiple signatures
CEC2005,July2005
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5. Related Work
Based on traditional paper cheques [FSTC,
NetCheque, MANDATE]
CEC2005,July2005
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6. Related Work
Based on traditional paper cheques [FSTC,
NetCheque, MANDATE]
Server based [NetBill, PayNow]
CEC2005,July2005
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7. Related Work
Based on traditional paper cheques [FSTC,
NetCheque, MANDATE]
Server based [NetBill, PayNow]
Modified version of e-Cash [Brands, Chaum]
CEC2005,July2005
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8. Related Work
Based on traditional paper cheques [FSTC,
NetCheque, MANDATE]
Server based [NetBill, PayNow]
Modified version of e-Cash [Brands, Chaum]
Need to revisit
- Introduction of Check 21 US federal law, Oct
2004.
- Development of FSTC’s eCheck system.
CEC2005,July2005
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9. E-Cheque Working
2. Signed eCheck
Payer
Payee
1. Invoice
3. Endorsed
eCheck
5. Account Statment
(Substitute eCheck)
Issuer
4. eCheck presentment
Acquirer
(Interbank settlement)
CEC2005,July2005
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10. FSTC eCheck Project
Backing from major financial institutions and
goverment agencies. (Around 100 members)
Electronic payment instrument for Internet.
Compatable with interactive web transactions
or e-mail.
Same legal framework as paper cheques.
Savings in transactional and processing cost.
CEC2005,July2005
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11. FSTC eCheck
Structure
Two core components - FSML and SDML
(XML block structures)
<fsml-doc docname="C" type="check">
<action> <blkname>C1 ... </action>
<check> <blkname>C2 ... </check>
<signature> <blkname>C3 ... </signature>
<account> <blkname>C4 ... </account>
<cert> <blkname>C5 ... </cert>
<attachment> <blkname>C6 ... </attachment> (optional)
<signature> <blkname>C7 ... </signature>
<cert> <blkname>C8 ... </cert>
</fsml-doc>
CEC2005,July2005
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12. FSTC eCheck
Structure
Two core components - FSML and SDML
(XML block structures)
<fsml-doc docname="C" type="check">
<action> <blkname>C1 ... </action>
<check> <blkname>C2 ... </check>
<signature> <blkname>C3 ... </signature>
<account> <blkname>C4 ... </account>
<cert> <blkname>C5 ... </cert>
<attachment> <blkname>C6 ... </attachment> (optional)
<signature> <blkname>C7 ... </signature>
<cert> <blkname>C8 ... </cert>
</fsml-doc>
Documents attached when endorsed.
CEC2005,July2005
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13. Issues with FSTC
eCheck
No data confidentiality of payer information.
CEC2005,July2005
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14. Issues with FSTC
eCheck
No data confidentiality of payer information.
No privacy for payer account details in an
eCheck.
CEC2005,July2005
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15. Issues with FSTC
eCheck
No data confidentiality of payer information.
No privacy for payer account details in an
eCheck.
Smart card security and non-repudiation of
transactional proof.
CEC2005,July2005
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16. Issues with FSTC
eCheck
No data confidentiality of payer information.
No privacy for payer account details in an
eCheck.
Smart card security and non-repudiation of
transactional proof.
Traceablility of transactional information. w.r.t
TTP.
CEC2005,July2005
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17. Issues with FSTC
eCheck
No data confidentiality of payer information.
No privacy for payer account details in an
eCheck.
Smart card security and non-repudiation of
transactional proof.
Traceablility of transactional information. w.r.t
TTP.
Smart card logging problem. [FSTC]
(http://www.echeck.org/)
CEC2005,July2005
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18. PEEC
A post pay method.
CEC2005,July2005
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19. PEEC
A post pay method.
Works with exisiting legal and finance
infrastrucutre
CEC2005,July2005
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20. PEEC
A post pay method.
Works with exisiting legal and finance
infrastrucutre
Provide better privacy features.
CEC2005,July2005
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21. PEEC
A post pay method.
Works with exisiting legal and finance
infrastrucutre
Provide better privacy features.
Protocols:
Setup phase
Registration - payer and payee
Payment
Deposit
CEC2005,July2005
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22. PEEC - Setup
Bank B setup
Bank B chooses primes p and q such that
|p − 1| = δ + k for a specified constant δ, and
p = γq + 1, for a specified integer γ.
CEC2005,July2005
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23. PEEC - Setup
Bank B setup
Bank B chooses primes p and q such that
|p − 1| = δ + k for a specified constant δ, and
p = γq + 1, for a specified integer γ.
A unique subgroup Gq of prime order q of the
∗
multiplicative group Zp and generators g0 , g1 ,
g2 of Gq are defined.
CEC2005,July2005
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24. PEEC - Setup
Bank B setup
Bank B chooses primes p and q such that
|p − 1| = δ + k for a specified constant δ, and
p = γq + 1, for a specified integer γ.
A unique subgroup Gq of prime order q of the
∗
multiplicative group Zp and generators g0 , g1 ,
g2 of Gq are defined.
Hash functions H(.) from a family of
collision-free hash functions are defined.
CEC2005,July2005
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25. PEEC - Bank
Setup. . .
Bank also generates a secret key XB ∈R Zq
X
and corresponding public keys h = g0 B ,
X
X
h1 = g1 B , h2 = g2 B .
The Bank also chooses a value n that
represents the number of PEE-cheques in a
PEE-cheque book.
CEC2005,July2005
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26. PEEC - Bank
Setup. . .
Bank also generates a secret key XB ∈R Zq
X
and corresponding public keys h = g0 B ,
X
X
h1 = g1 B , h2 = g2 B .
The Bank also chooses a value n that
represents the number of PEE-cheques in a
PEE-cheque book.
p, q, H(.), (g0 , g1 , g2 ) are published along with
h, h1 and h2 .
CEC2005,July2005
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27. PEEC - Payer and
Payee Setup
Payer U setup
Each payer U has to intitally register with the
u1
Bank B. The payer generates a public key I = g1
u
where u1 ∈ Gq such that g1 1 g2 = 1.
CEC2005,July2005
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28. PEEC - Payer and
Payee Setup
Payer U setup
Each payer U has to intitally register with the
u1
Bank B. The payer generates a public key I = g1
u
where u1 ∈ Gq such that g1 1 g2 = 1.
Payee M setup
Similar to the payer, each payee M intitally register with the Bank B to obtain a certified public key
XP
P = g1 where XP ∈ Gq .
CEC2005,July2005
Privacy Enhanced Electronic Cheque System – p.12/19

29. PEEC - Registration
Protocol
Payer U
Bank B
I
u
I = g1 1
→
k, [k1 , k2 , .kj ., kn ], t ∈R Zq
′
∀ n: Ei = H(Ig bact g i )
′
∀ n: SE ′ = Ei XB + kj mod q
i
t
y = g1 ; Y = Iy
SY = Y XB + k2 mod q
Y,SY ,y,t,
←
′
′
[Ei ,...,Ei+n ],
←
[S ′ ,...,S ′
E
i
E
←
]
i+n
VerifySign(SY ′ )
∀ n: VerifySign(SE ′ )
CEC2005,July2005i
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30. PEEC - Payment
Protocol
Payer U
Payee M
{amt,d/t,M N ame}S
←
M
s, w ∈R Zq
u
A = Y s ; A1 = g1 1 s , A2 = y s
O = H(d/t||M N ame||amt)
r = u1 s2 t − O.u1 .s
′
r = r.s
′
r ,A1 ,A2 ,A,O
→
′
Ei ,S ′ ,Y,SY ,SU ′
E
i
E
→
i
′
O = H(d/t||M N ame||amt)
?
VerifySign(SY ) ; A = A1 A2
?
CEC2005,July2005
′
′
A = Cheque r
AO Y System – p.14/19
1
Privacy Enhanced Electronic

31. PEEC - Deposit
Protocol
Payee M
Bank B
k3 ∈R Zq
SMO′ = O′ XM + k3 mod q
amt,d/t,M N ame,O
′
→
SMO′ ,r ′ ,SY ,Y,
→
′
SIE ′ ,Ei ,A,A1 ,A2
i
→
O′′ = H(d/t||M N ame||amt)
?
?
O′′ = O′ = O
VerifySign(SY ), VerifySign(SIE ′ )
i
VerifySign(SMOrder′ )
?
VerifySign(SY ) ; A = A1 A2
CEC2005,July2005
(I, bact, i) = ObtainIdbasenum(Y )
Privacy Enhanced Electronic Cheque System – p.15/19

32. PEEC Characteristics
Security
(a) There exists no polynomial-time algorithm to
solve the discrete log problem,
(b) Schnorr signatures are unforgeable and
(c) Hash functions are cryptographically secure.
CEC2005,July2005
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33. PEEC Characteristics
Security
(a) There exists no polynomial-time algorithm to
solve the discrete log problem,
(b) Schnorr signatures are unforgeable and
(c) Hash functions are cryptographically secure.
Privacy
- The payer’s identity remains protected by an anonymous identity.
- No communication with the bank to create an anonymous identity A
- There is a provable linkage between the original identity and the anonymous identity.
- The anonymous identity is guaranteed to be secure as long as the linkage value t remains known only to the payer and the bank.
CEC2005,July2005
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34. PEEC Characteristics
Authentication
- Based on public key verification.
- The proof for anonymous identity is essential a Schnorr identification protocol in a
non-interactive setting.
- From Schnorr identification and the payer’s signature on the PEE-cheque presented to
the payee, authentication of the payer is guaranteed.
- The Bank authenticates the payee by verifying the digital signature on the Order′ that
is sent by the payee during the deposit protocol.
- The authentication of the payee towards the payer and the bank is based on verification
of the payee’s public key identity M.
CEC2005,July2005
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35. PEEC Characteristics
Authentication
- Based on public key verification.
- The proof for anonymous identity is essential a Schnorr identification protocol in a
non-interactive setting.
- From Schnorr identification and the payer’s signature on the PEE-cheque presented to
the payee, authentication of the payer is guaranteed.
- The Bank authenticates the payee by verifying the digital signature on the Order′ that
is sent by the payee during the deposit protocol.
- The authentication of the payee towards the payer and the bank is based on verification
of the payee’s public key identity M.
Unforgeability
- Every e-cheque created by the bank uses a cryptographically secure hash function with
inputs, payer’s identity I, payer’s unique bank account (bact) and a unique e-cheque
number generated by the bank (i).
- The e-cheque is digitally signed.
- For a e-cheque to be forgeable by the payer, the payer must be able to forge the digital
CEC2005,July2005
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36. PEEC - Extension
Multiple Payers and Payees.
CEC2005,July2005
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37. PEEC - Extension
Multiple Payers and Payees.
Multiple Account withdraws and deposits.
CEC2005,July2005
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38. PEEC - Extension
Multiple Payers and Payees.
Multiple Account withdraws and deposits.
Mobile payments.
CEC2005,July2005
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39. PEEC - Extension
Multiple Payers and Payees.
Multiple Account withdraws and deposits.
Mobile payments.
Point of sale payments.
CEC2005,July2005
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40. Thank You
krishnan@ics.mq.edu.au
CEC2005,July2005
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