1. Design of E-Check System Date : Apr. 11, 2001 Course Title : Computer Security and Electronic Payment System Team Members : 최미진, 김민지, 박정호, 전우석

2. 2 Content 1. What are E-Checks? 2. Why E-Checks? 3. Differences 4. E-Check Concept 5. E-Check Signatures and Endorsement 6. E-Checkbook Distribution & PKI 7. Trend of Research 8. Putting E-Checks to work

3. 3 1. What are E-Checks? Checks, sans paper eChecks work just like paper checks Same legal treatment as paper checks An all-electronic, end-to-end payment instrument Digitally signed promises to pay Signatures on echeck, endorsed when deposited Support for multiple signatures Bank payments, safe enough for the Internet Inherit sound practices for processing checks Add strong public key cryptography

4. 4 Deliver clear benefits for all parties (faster, lower costs, fewer errors) Support multiple business models Leverage current banking system Blend current business practices with the latest technologies and the Internet Serve business and consumer interests (half of all paper checks are business-to-business) Facilitate commerce in general… …including ecommerce! 2. Why E-Checks?

5. 5 3. Differences Comparison of Electronic Payments by Virtual and by SET CharacteristicsVirtual CheckSET Payment model reproduced Paper-based checks Bank cards (credit and debit) Interaction with the user E-mail, Web Web AuthenticationOffline Online Authorization of the payer Sent jointly with the payment instructions Preauthorization at subscription time Trusted third partyNot availableMandatory Data on the payer's account Available to the merchant Hidden from the merchant

6. 6 Payee Electronic Checkbook Payer Endorsement Check E-Mail Payee’s Bank credit account Accounts Receivable Payer’s Bank debit account Clear and settle echeck Invoice Electronic Checkbook Deposit E-Mail or WWW Signature Certificates Signature Certificates Invoice Check Signature Certificates Accounts Payable Invoice Check Signature Certificates 4. E-Check Concept

7. 7 public key references check payer’s signature action payer’s account payer’s cert attachment invoice payer’s bank’s signature payer’s bank’s cert Check public key references signatures endorsement endorser’s signature action endorser’s account endorser’s cert endorser’s bank’s signature endorser’s bank’s cert Endorsement public key references signatures deposit depositor’s signature action depositor’s account depositor’s cert depositor’s bank’s signature depositor’s bank’s cert Deposit signatures 5. E-Check Signatures and Endorsement

8. 8 1. Sales contact Customer Marketing and sales 2. Account agreement and customer data Bank echeck server Bank Certification Authority 7. X.509 certificates and account blocks 12. CRL 11. Account activation 10. Card sent notification 5. Public key, certificate request, account block request 6. X.509 certificates, account block Card initialization Bank account administrative systems 8. PIN mailer 9. Electronic checkbook, smart card reader, software, instructions 4. Electronic checkbook issuance instructions 3. Echeck account information 6. E-Checkbook Distribution & PKI

9. 9 7. Trend of Research Financial Services Technology Consortium (FSTC) E-Check exchangeable between users without a server Utilizing fully existing ACH, ECP http://www.fstc.org Net Cheque Using authentication standard, Kerberos, based on DES http://www.netcheque.org Net Bill Payment System of E-check or Electronic Debit Card http://www.netbill.com Others NetChex (http://www.netchex.com),http://www.netchex.com ECheque (http://mkn.co.uk)http://mkn.co.uk KAIST ( e-check using Expert Systems and agent tech)

10. 10 8. Putting E-Checks to work Exponential market size Many obstacles of introducing SET Need more secure payment system Less impact on existing system E-Check for Korean Market