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Poor security decisions expose payment terminals to mass fraud

Lucian Constantin | Jan. 4, 2016
Cryptographic key reuse is rampart in European payment terminals, allowing attackers to compromise them en masse.

payment terminal hacking reverse engineering HSM JTAG debugging
The debugging of the HSM in a payment terminal through active JTAG. Credit: Security Research Labs.

Some payment terminals can be hijacked to commit mass fraud against customers and merchants, researchers have found.

The terminals, used predominantly in Germany but also elsewhere in Europe, were designed without following best security principles, leaving them vulnerable to a number of attacks.

Researchers from Berlin-based Security Research Labs (SRLabs) investigated the security of payment terminals in Germany and were able to use them to steal payment card details and PIN numbers, hijack transactions and compromise merchant accounts. They plan to present their findings at the 32nd Chaos Communication Congress (32C3) later this month.

According to Karsten Nohl, the founder and chief scientist of SRLabs, most terminals in Germany use two communication protocols, ZVT and Poseidon, to talk with cash registers and payment processing providers respectively.

Both of these protocols have features that can be abused by hackers, but the problem is further exacerbated by poor design decisions by payment terminal manufacturers, like the reuse of cryptographic keys across all devices.

The ZVT protocol is used by around 80 percent of payment terminals in Germany to communicate with cashier workstations, SRLabs estimates. It was originally designed for serial connections, but it's now used mostly on TCP/IP networks. This means that on local networks attackers can use techniques such as ARP spoofing to position themselves between terminals and cashier stations in order to intercept and send ZVT commands.

Some of the ZVT traffic is unencrypted, according to SRLabs. For example, a man-in-the-middle attacker can use the protocol without authentication to read the information stored on the magnetic stripes of payment cards inserted into payment terminals.

The protocol also has a mechanism that allows requesting and obtaining a card's PIN number as well, but such requests need to be signed with a message authentication code (MAC). The MAC is verified using a key that's typically stored inside the payment terminal's hardware security module (HSM), a special component designed for secure key storage and cryptographic operations.

The problem is that most terminals, regardless of manufacturer, share the same signature key, violating a basic principle of security design, Nohl said.

The HSM in some terminal models is vulnerable to so-called timing side channel attacks that can be used to extract the key within minutes after gaining access to the terminal through a JTAG debugging connection or a remote code execution flaw, he said.

Attackers can easily find and buy such vulnerable terminals on eBay. Once they extract the key from it, they can use it against most other devices, including newer models, because of the pervasive key reuse among payment terminal manufacturers in Germany.

 

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