Security Architecture

The key security module used in the DUET system is a microprocessor chip card. All external information comes to the card in encoded form and is deciphered by the application program inside the card using the keys stored in the protected memory area. Similarly, the information that leaves the card is encoded.

Card-to-Card Concept
DUET’s security architecture is based on the encrypted communication between the two microprocessors embedded in both cards (client & merchant) thus eliminating the need for additional terminal device security: The terminal equipment as well as user workstations do not store secret information, therefore the terminal can be any device (PC, ATM, POS device, Mobile phone, Internet terminal etc.) that connects two security modules and empowers them to compute and perform transactions, accept PIN codes, provide a user interface, etc.

Crypto-Certificates
Each transaction in the DUET system has two certificates, the certificate of the issuer and the certificate of the acquirer, which are encoded using two respective issuer and acquirer keys. These certificates are the evidence of authenticity of the transaction and subject to verification by the issuer and the acquirer. Furthermore a session key which is unique for every transaction is generated at the beginning of each data exchange. Once the merchant uploads the transaction batch, the acquirer deciphers his part of the encrypted transaction and generates a clearing message intended for the issuer which contains the encoded issuer’s certificate. Upon receipt thereof, the issuer deciphers his part of the encrypted transaction and if the data received from the acquirer matches the deciphered issuer certificate, the issuer authorizes the fund transfer to the acquirer’s bank account.

Card Issuance
The card issuing process is based on a hierarchical scheme of distributing the secret keys and passwords on different levels:

• The primary issuance/initialization is conducted at the Main Initialization Center of the System, which is the exclusive holder of the General Keys of the System. The Main Initialization Center (MIC) is a fundamental component of the payment system. In fact, the MIC is a trust center, which is entitled to generate the General Key and load it onto all of the cards circulating in the system. Besides, the Main Initialization Center is designated to administer the payment system by establishing the common rules of the system functionalities. MIC's responsibilities include the primary initialization of smart cards, maintaining and managing the system directories shared by all members of the system (such as the system hot list). The General (system) keys can be managed only at the MIC.

• The secondary issuance (initial stage) is conducted at the Member level (Bank Issuer). A Main-Member in the DUET System is usually a banking (financial) institution that establishes and maintains customer accounts, accepts funds from customers and holds them on customers’ accounts, issues and services customer cards (i.e. performs secondary issuance functions), makes contracts with merchant outlets, issues and services merchant cards (i.e. performs the acquirer’s functions). For this stage the member uses an additional set of keys, staff cards, and passwords thus separating the security layers between MIC and Main-Member. The personalization of the client cards (final stage of the secondary issuance) is a non-secret procedure that can be performed in any place in the presence of a client. Bank Members are further differentiated into a Principal and an Associate Member, depending on the type of responsibilities involved in connection with the possession and management of the key information, and on the functions of hardware management and maintaining the directory of regulatory and reference information. The settlements between the participants are performed in the Center for Interbank Settlements (CIS). The DUET system is built on the MS Windows, MS SQL platforms and supports both standard and specialized (oriented to specific peripheral equipment such as terminals, ATMs, unattended service locations) network protocols.