Message Authentication Codes

The presented design uses two types of communications from the merchant to the acquiring system: encrypted and unencrypted. Encrypted communications are only required in the case of Cardholder Orders. The merchant transmits all other acquirer-directed transactions via the cardholder’s browser and does not require encryption by the merchant (although they will require encryption between the acquirer and the cardholder at some point).

However, all transactions from the merchant to the acquirer must ensure that the information was not altered between the time it was constructed by the merchant to the time it is received by the acquirer. Furthermore, should such an alteration be effected, the merchant must have the ability to repudiate the transaction and the acquirer must be able to confirm this repudiation. Similarly, in the case of e-mail notification from the acquirer to the merchant of order authorization, the acquirer must be able to repudiate the response and the merchant must be able to confirm this repudiation.

Because encryption is provided by the acquirer’s SSL certificate and SSL enabled web server, we do not need to concern ourselves with encryption of the transactions, but only with the authentication of the plaintext messages transmitted between merchants and acquirers. Such a scenario normally calls for a mechanism such as a Message Authentication Code (MAC).

Given a key and a plaintext message, MAC generation involves a one-way hashing algorithm so that a replicable bit sequence known as a MAC can be generated. However, given only the plaintext message, the recreation of the original key is very difficult[1], and given the plaintext message and the MAC, any change to the plaintext will invalidate the MAC.

In this way, the cardholder cannot effect a Store and Forward attack since any change to the amount of an order will invalidate the hash supplied by the merchant. Without the merchant’s key used to create the hash in the first place, the cardholder cannot replace the MAC with a new hash consistent with the altered value.

Neither can the cardholder effect an arbitrary transaction against a card since any card transaction requires a valid MAC generated by the merchant’s key.

Finally, if the MAC is also used to validate any e-mail from the acquirer to the merchant, the merchant can be assured that the acquirer sent the message. This is because any spoofing attempt would similarly require access to the merchant’s own key to authenticate the e-mail message.

[1] Alternatively, a number of possible keys can be generated but only one of which is the correct key. In this way, the MAC algorithm is not collision-free, but because our data is so tightly structured by the XML DTDs, the odds of a collision successfully matching the XML DTD are too remote to be considered.