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This is off the top of my head, but is 99% there.  Also I'll ignore
some obsolete stuff.

The physical layout of the cards are standard.  The LOGICAL makeup
varies from institution to institution.  There are some generally
followed layouts, but not mandatory.

There are actually up to three tracks on a card.

Track 1 was designed for airline use.  It contains your name and
usually your account number.  This is the track that is used when
the ATM greets you by name.  There are some glitches in how things
are ordered so occasionally you do get "Greetings Bill Smith Dr."
but such is life.  This track is also used with the new airline
auto check in (PSA, American, etc)

Track 3 is the "OFF-LINE" ATM track.  It contains such nifty
information as your daily limit, limit left, last access, account
number, and expiration date.  (And usually anything I describe in track
2).  The ATM itself could have the ability to rewrite this track to
update information.

Track 2 is the main operational track for online use.  The first thing
on track to is the PRIMARY ACCOUNT NUMBER (PAN).  This is pretty
standard for all cards, though no guarantee.  Some additional info
might be on the card such as expiration date.  One interesting item
is the PIN offset.   When an ATM verifies a PIN locally, it usually
uses an encryption scheme involving the PAN and a secret KEY.
This gives you a "NATURAL PIN" (i.e. when they mail you your pin, this
is how it got generated.)  If you want to select your own PIN, they
would put the PIN OFFSET in the clear on the card.  Just do modulo 10
arithmetic on the Natural PIN plus the offset, and you have the
selected PIN.  YOUR PIN IS NEVER IN THE CLEAR ON YOUR CARD.  Knowing
the PIN OFFSET will not give you the PIN.  This will required the
SECRET KEY.

Hope that answers your question



Deposits on ATM:

Various banks have various systems.  As an example, at CITIbank
a deposit was made to a specific account.  Your account was updated
with a MEMO update, i.e. it would show up on your balance.  However
it did not become AVAILABLE funds until it was verified by a teller.
On the envelope was Customer ID number, the envelope number and
the Entered dollar amount, the branch # and the Machine #.

There was also a selection for OTHER PAYMENTS.  This allowed you to
dump any deposit into the ATM.

What are you assured then when you deposit to an ATM ?

1) You have a banking RECORD (not a reciept at Citibank).  If you
   have this record, there is a VERY high percentage that you
   deposited something at that ATM.

2) Some banks have ways of crediting your deposit RIGHT NOW.
   This could be done by a balance in another account (i.e. a long
   term C.D. or a line of credit.)  That way they can get you if
   you lied.




   I've worked with about 75% of the types of machines on the market
and NONE of them split a card in half upon swallow.  However, some
NETWORKS have a policy of  slicing a card to avoid security
problems.

Trusting an ATM.
Intresting you should bring this up, I'm just brusing up a paper
describing a REAL situation where your card and PIN are in the clear.
This involves a customer using a bank that is part of a network.
All the information was available to folks in DP, if they put in some
efforts to get it.






          Mis-Implementation of an ATM PIN security system


1.  Synopsis
In an EFT (Electronic Funds Transfer) network, a single node which  does
not  implement  the  proper  security  can  have  effects throughout the
network.  In this paper, the author describes an example of how security
features  were  ignored, never-implemented, and/or incorrectly designed.
The human factors involved in the final implementation are  explored  by
showing  several major vulnerabilites caused by a Savings and Loan and a
regional EFT network's lack of vigilance in installing  an  EFT  network
node.   While  using  an  EFT  system as an example, the concepts can be
extrapolated into the implementation of other secured systems.


2.  Background
A small Savings and Loan  was  setting  up  a  small  (10  to  16  ATMs)
proprietary  Automatic  Teller  Machine (ATM) network.  This network was
then intended to link up to a regional network.  The manufacturer of the
institution's  online  banking  processor  sent an on-site programmer to
develop the required interfaces.

An ATM network consists of three main  parts.   The  first  is  the  ATM
itself.   An ATM can have a range of intelligence.  In this case the ATM
was able to decode a  PIN  (Personal  Identification  Number)  using  an
institution  supplied  DES  (Data Encryption Standard) key.  It was then
required to send a request for funds to the host where it would receive
authorization.

The second portion of the network is the ATM controller.  The controller
monitors the transaction, and routes the message  to  the  authorization
processor.   The  controller  would  also generally monitor the physical
devices and statuses of the ATM.

The third portion of the network is the authorization system.   In  this
case  customers  of  the  local  institution  would have the transaction
authorized on the same processor.  Customers  from  foreign  (i.e.   one
that  does not belong to the institution that runs the ATM) institutions
would be authorized by the regional  network.   Authorization  could  be
from  a  run-up  file which maintains establishes a limit on withdrawals
for a  given  account  during  a  given  period.   A  better  method  is
authorization direct from the institution which issued the card.


3.  Security
The system has a two component key system to allow access to the network
by the customer.  The first  is  the  physical  ATM  card  which  has  a
magnetic stripe.  The magnetic stripe contains account information.  The
second component is the Personal Identification Number (PIN).   The  PIN
is hand entered by the customer into the ATM at transaction time.  Given
these  two  parts,  the  network  will  assume  that  the  user  is  the
appropriate customer and allow the transaction to proceed.

The Magnetic stripe is in the clear and may be assume to be reproducible
using various methods, thus the PIN is crucial security.


 Security PIN security

3.1.  PIN security

3.1.1.  PIN key validation method

PINs can be linked up to a particular card in a  number  of  ways.   One
method  puts  the  PIN  into  a central data base in a one-way encrypted
format.  When a PIN is presented, it  would  be  encrypted  against  the
format  in  the  data base.  This method requires a method of encrypting
the PIN given at the ATM, until it can be verified at the central  site.
Problems  can  also  occur if the institution wants to move the PIN data
base to another processor, especially from a different computer vendor.

Another  method  is  to take information on the card, combine it with an
institution PIN encryption key (PIN key) and use that  to  generate  the
PIN.   The institution in question used the PIN key method.  This allows
the customer to be verified at the ATM itself and no transmission of the
PIN  is  required.   The  risk  of  the  system  is  the PIN key must be
maintained under the tightest of security.

The PIN key is used to generate the natural PIN.   This  is  derived  by
taking  the  account number and using DES upon it with the PIN key.  The
resulting number then is decimialized by doing a lookup on  a  16  digit
decimalization  table  to  convert  the  resulting hexadecimal digits to
decimal digits.  An ATM loaded with the appropriate  PIN  key  can  then
validate  a customer locally with no need to send PIN information to the
network, thereby reducing the risk of compromise.

The PIN key requires the utmost security.  Once the PIN  key  is  known,
any  customer's  ATM card, with corresponding PIN can be created given a
customer account number.  The ATM allows for the PIN to  be  entered  at
the  ATM  in  two parts, thus allowing each of two bank officers to know
only one half of the key.  If desired, a terminal  master  key  can  be
loaded and then the encrypted PIN key loaded from the network.

The  decimalization table usually consists of 0 to 9 and 0 to 5, ("0" to
"F" in hexadecimal where "F" = 15).  The decimalization table can be put
into any order, scrambling the digits and slowing down an attacker.  (As
a side note, it could be noted that using the "standard" table, the  PIN
digits  are  weighted  to 0 through 5, each having a 1/8 chance of being
the digit, while 6 through 9 has only a 1/16 chance.)

When handling a foreign card, (i.e.  one that does  not  belong  to  the
institution that runs the ATM), the PIN must be passed on to the network
in encrypted form.  First, however, it must be passed from  the  ATM  to
the  ATM controller.  This is accomplished by encrypting the PIN entered
at  the  ATM  using  a  communication  key  (communication   key),   The
communication  key  is  entered  at  the  ATM much like the PIN key.  In
addition, it can be downloaded from the network.  The PIN  is  decrypted
at  the controller and then reencrypted with the network's communication
key.

                                 - 2 -

Security
PIN security
PIN key validation method


Maintaining  the  the  security  of  the  foreign  PIN  is  of  critical
importance.   Given  the  foreign PIN along with the ATM card's magnetic
image, the perpetrator has access to an account  from  any  ATM  on  the
network.    This  would  make  tracking  of  potential  attackers  quite
difficult, since the ATM and the institution they extract funds from can
be  completely  different from the institution where the information was
gleaned.

Given  that  the  encrypted  PIN  goes  through   normal   communication
processes,  it  could  be  logged  on  the normal I/O logs.  Since it is
subject to such logging, the PIN in any form should be denied  from  the
logging function.


3.2.  Security Violations
While  the EFT network has potential to run in a secured mode given some
of the precautions outlined above, the potential for abuse  of  security
is  quite easy.  In the case of this system, security was compromised in
a number of ways, each leading to the potential loss of funds, and to  a
loss of confidence in the EFT system itself.


3.2.1.  Violations of the PIN key method
The  two  custodian  system simply wasn't practical when ATMs were being
installed all over the state.  Two examples show this:   When  asked  by
the  developer  for the PIN key to be entered into a test ATM, there was
first a massive search for the key, and then it was read to him over the
phone.   The  PIN  key  was  written  on  a scrap of paper which was not
secured.  This is the PIN key that all the customer PINs are  based  on,
and which compromise should require the reissue of all PINs.)

The  importance of a system to enter the PIN key by appropriate officers
of the bank should not be overlooked.  In  practice  the  ATM  installer
might  be the one asked to enter the keys into the machine.  This indeed
was demonstrated in this case where the ATM installer not only had  the
keys  for  the  Savings and Loan, but also for other institutions in the
area.  This was kept in the high security area of the  notebook  in  the
installer's front pocket.

Having  a  Master key entered into the ATM by officers of the bank might
add an additional layer of security to the system.  The actual  PIN  key
would then be loaded in encrypted form from the network.  In the example
above, if the installer was aware of the terminal master key,  he  would
have to monitor the line to derive the actual PIN key.

The  use  of  a downline encrypted key was never implemented, due to the
potential complications and added cost of such a  system.   Even  if  it
was,  once violated, security can only be regained by a complete reissue
of customer PINs with the resulting confusion ensuing.



                                 - 3 -

Security
Security Violations
Network validated PIN Security violations


3.2.2.  Network validated PIN Security violations
Given  the  potential  for untraced transactions, the maintenance of the
foreign PINs security was extremely important.  In the PIN  key  example
above,  any  violation  would  directly  affect  the  institution of the
violators.  This would limit the scope of an investigation, and  enhance
the  chance of detection and apprehension.  The violation of foreign PIN
information has a much wider sphere of attack,  with  the  corresponding
lower chance of apprehension.

The  communication  key  itself  was  never  secured.  In this case, the
developer  handed  the  key  to  the  bank  officers,  to   ensure   the
communication  key  didn't get misplaced as the PIN key did (This way he
could recall it in case it got lost).  Given the communication key,  the
security  violation  potential  is  simple enough.  The programmer could
simply  tap  the  line  between  the  ATM  and  the  controller.    This
information  could  then generate a set of PIN and card image pairs.  He
would even have account balances.

Tapping the line would have been an effort, and worse yet he  could  get
caught.   However,  having  the  I/O  logs could serve the same purpose.
While originally designed to obscure PIN information in  the  I/O  logs,
the  feature was disabled due to problems caused by the regional network
during testing.  The I/O logs would be sent to the developer  any  time
there was a problem with the ATM controller or the network interface.

The  generation of PIN and card image pairs has a potential for even the
most secured system on the network  to  be  attacked  by  the  lapse  in
security  of  a weaker node.  Neither the communication key, nor the PIN
should ever be available in the clear.  This requires  special  hardware
at  the  controller  to  store  this  information.   In  this  case, the
institution had no desire to install a  secured  box  for  storing  key
information.   The  communication key was available in software, and the
PIN was in the clear during the process of decrypting from the  ATM  and
re-encrypting  with  the network key.  Any programmer on the system with
access to the controller could put in a log file to tap off the PINs  at
that point.

The largest failure of the system, though, was not a result of the items
described above.  The largest failure in the system was in the method of
encrypting  the  PIN  before  going  to the network.  This is due to the
failure of the network to have a secured key between sites.  The PIN was
to  be  encrypted  with  a  network  key.   The  network key was sent in
encrypted form from the network to the ATM controller.  However, the key
to  decrypt  the network key was sent almost in the clear as part of the
start-of-day sequence.

Any infiltrator monitoring the  line  would  be  able  to  get  all  key
information  by  monitoring the start-of-day sequence, doing the trivial
decryption of the communication key, and proceeding to gather card image
and PIN pairs.  The infiltrator could then generate cards and attack the
system at his leisure.

                                 - 4 -

Security
Security Violations
Network validated PIN Security violations


The network-ATM controller security failure is the most critical feature
since it was defined by a regional network supporting many institutions.
The network was supposedly  in  a  better  position  to  understand  the
security requirements.


4.  The Human Factors in Security  Violation
It is important the users of a system be appraised of the procedures for
securing the system.  They should understand the risks,  and  know  what
they  are  protecting.   The  bank officers in charge of the program had
little experience with ATM systems.  They were never fully indoctrinated
in  the  consequences of a PIN key or communication key compromise.  The
officers showed great surprise when the developer was able  to  generate
PINs  for  supplied  test cards.  Given the potential risk, nothing more
was done to try to change the PIN key,  even  though,  they  were  quite
aware  that  the  PIN  key was in the developer's possession.  They once
even called the developer for the PIN key when they weren't able to find
it.

The  developer  had a desire to maintain a smooth running system and cut
down on the development time of an  already  over-budget  project.   Too
much security, for example modifying I/O logs, could delay the isolation
or repair of a problem.

The regional network was actually a marketing company who  subcontracted
out  the  data processing tasks.  They failed to recognized the security
problem of sending key information with extremely weak encryption.   The
keys  were  all but sent in the clear.  There seemed to be a belief that
the use of encryption in and of itself caused a network to  be  secured.
The  use  of DES with an unsecured communication key gave the appearance
of a secured link.

The lack of audits of the system, both in design and implementation  was
the  final security defect which allowed the system to be compromised in
so many ways.  An example of the Savings and Loan's  internal  auditors
failure  to  understand  the problems or technology is when the auditors
insisted that no contract developers would be  allowed  physically  into
the  computer room.  The fact was, access to the computer room was never
required to perform any of the described violations.


5.  Security Corrections
As in any system where security was required, the time to  implement  it
is  at  the  beginning.  This requires the review of both implementation
ormed  to
verify  that  the  procedures  are  followed  as  described in the plan.
Financing, scheduling and man power for such audits must be allocated so
security issues can be addressed.

For this institution, the first step would have been to indoctrinate the


                                 - 5 -

Security Corrections

banking  officers  of  the risks in the ATM network, the vulnerabilites,
and the security measures required.


Custodians  of  all  keys should be well aware of their responsibilities
for those keys.  A fall back system of key recovery must be in place  in
case an officer is not available for key entry.

The  cost  of installing hardware encryption units at the host should be
included in the cost of putting in the  system.   The  host  unit  could
generate  down-line  keys for both the PIN key and the communication key
thus making it more difficult to derive  these  keys  without  collusion
from at least three people.

A  secured  communications key should be established between the Network
and the institution.  This would  allow  for  the  exchange  of  working
communication  keys.   This  key  should  be  changed  with a reasonable
frequency.

All these areas should be audited in both the system  specification  and
implementation  to  make sure they are not being abridged in the name of
expediency.


6.  Summary
In this view of a single  institution,  a  number  of  failures  in  the
security  system  were  shown.   There  was  shown a definite failure to
appreciate what was required in the way of security for  PINs  and  keys
used  to  derive  PIN  information.   An avoidance of up front costs for
security lead to potentially higher cost in the future.   The  key  area
was the lack of audits of the EFT system by both the institution and the
network, causing potential loss to all institutions on the network.











                                 - 6 -

For those of you who would like a deeper view of thes of ATM
PIN stuff, I'm merging some previous postings along with a paper


 
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