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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.

In the worst case scenario, attackers could hijack terminals and use them to issue refunds to bank accounts under their control from thousands of merchants by simply iterating through terminal IDs, which are usually assigned incrementally.

Nohl said that SRLabs performed a demonstration of the attacks for payment terminal manufacturers. Their response was that they haven't seen this type of fraud outside of a laboratory setting, but that they're working to address the issue, he said.

The people who implemented these protocols, which were developed independently from each other, didn't understand how to do proper key management in both cases, Nohl said.

Fortunately, there is functionality in them that allows older keys to be replaced with new ones and which could be used to provide every terminal with its own unique key, as long as the backend servers are also modified to support such a deployment, the researcher said.

The terminals would still be vulnerable to remote code execution or timing side channel attacks, but at least extracting a key would restrict the abuse to a single terminal, not hundreds of thousands.

In the short term, it's paramount to change existing keys with unique ones for every terminal, but in the longer term better standards should be designed that rely less on the security of the terminals themselves. This could be done by implementing things like public-key cryptography instead of symmetric-key algorithms, Nohl said.

 

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