There should be a 9-minute film on Newsnight tonight (10:30pm, BBC Two) showing some research by Steven Murdoch, Saar Drimer, Mike Bond and me. We demonstrate a middleperson attack on EMV which lets criminals use stolen chip and PIN cards without knowing the PIN.
Our technical paper Chip and PIN is Broken explains how. It has been causing quite a stir as it has circulated the banking industry privately for over 2 months, and it has been accepted for the IEEE Symposium on Security and Privacy, the top conference in computer security. (See also our FAQ and the press release.)
The flaw is that when you put a card into a terminal, a negotiation takes place about how the cardholder should be authenticated: using a PIN, using a signature or not at all. This particular subprotocol is not authenticated, so you can trick the card into thinking it’s doing a chip-and-signature transaction while the terminal thinks it’s chip-and-PIN. The upshot is that you can buy stuff using a stolen card and a PIN of 0000 (or anything you want). We did so, on camera, using various journalists’ cards. The transactions went through fine and the receipts say “Verified by PIN”.
It’s no surprise to us or bankers that this attack works offline (when the merchant cannot contact the bank) — in fact Steven blogged about it here last August.
But the real shocker is that it works online too: even when the bank authorisation system has all the transaction data sent back to it for verification. The reason why it works can be quite subtle and convoluted: bank authorisation systems are complex beasts, including cryptographic checks, account checks, database checks, and interfaces with fraud detection systems which might apply a points-scoring system to the output of all the above. In theory all the data you need to spot the wedge attack will be present, but in practice? And most of all, how can you spot it if you’re not even looking? The banks didn’t even realise they needed to check.
This attack is both academically and practically significant. We get reports weekly from different victims of phantom withdrawals, and these include large numbers of stolen cards used to make purchases in the window between theft and the cancellation of the card. Currently these victims are denied refunds by their banks, but this attack could explain some of the frauds we are seeing. The fact the receipt says “PIN Verified” when actually it wasn’t raises a whole load of legal and evidential questions which call into question the banking industry’s claim that their systems work (and log) properly. Merchants will be none too pleased either; the system no longer protects their interests but only those of the issuing bank.
There’s been some confusion, possibly even misinformation, about our attack and its effects. Cartes Bancaires in France were so concerned that they briefed the press way in advance of our plans for publication. We can set the record straight on a few things:
- the attack applies to cards used online (where the merchant POS contacts the bank) as well as offline;
- the attack works regardless of the amount of money spent (not just for small value amounts that are below floor limit);
- the attack doesn’t work once a card has been cancelled by the bank — just like stolen cards in the past can only be used for a certain window of time once the cardholder discovers the loss;
- the attack doesn’t work at ATMs (cash machines);
- the failure applies to bank card schemes based on EMV – the most widely deployed standard for smartcard payments. Older national smartcard schemes may or may not be vulnerable; we don’t know.
So what went wrong? In essence, there is a gaping hole in the specifications which together create the “Chip and PIN” system. These specs consist of the EMV protocol framework, the card scheme individual rules (Visa, MasterCard standards), the national payment association rules (UK Payments Association aka APACS, in the UK), and documents produced by each individual issuer describing their own customisations of the scheme. Each spec defines security criteria, tweaks options and sets rules – but none take responsibility for listing what back-end checks are needed. As a result, hundreds of issuers independently get it wrong, and gain false assurance that all bases are covered from the common specifications. The EMV specification stack is broken, and needs fixing.
We’re really worried that if something isn’t done to fix this problem, and the many others we’ve found in EMV, other regions adopting it (like the USA) are going to make the same mistakes again and again – and that means customers stay vulnerable.
That’s why again we’re arguing that Chip and PIN is broken. We don’t want people keeping their money in shoe boxes – we want the problems fixed. That means getting decent governance for the system that involves all the stakeholders – banks, regulators, merchants and customers.