Design and feasibility of mobile peer-to-peer payment systems

Galen, Rick van (2014) Design and feasibility of mobile peer-to-peer payment systems.

Abstract:Digital payment methods are becoming increasingly popular. The advent of Bitcoin and Apple Pay is an indication that digital payment systems are relevant today and even moreso in the future. However, these payment systems firmly rely on central infrastructures. Many also only bring payments to digital platforms, but lack the possibility for people to be paid without additional infrastructure. Lastly, privacy for payers is rarely achieved in most current commercial payment systems. In this thesis, we investigate a novel design of digital payments especially targeted at smartphones and tablets to address the above shortcomings. We name this system a peer-to-peer payment system because it transfers digital coins from device to device. This design choice enables two distinguishing features: offline payments - the sending of payments without a third party - and receiving payments. In this thesis, we represent three protocol designs for such mobile peer-to-peer payment systems, as well as a novel contribution by introducing a method for sharing the responsibility of anonymity protection amongst multiple parties. The main result of this thesis is an assessment of the feasiblity of a peerto- peer mobile payment system. We developed a prototype application and assessed technical choices that can be made. It was found that from the available local communication methods, the newly available Wi-Fi Direct medium was preferable to NFC and Bluetooth. The prototype application shows that the right technology is currently available to succesfully implement peer-to-peer payment systems on mobile devices. The protocol designs use a number of cryptographic constructs. An important finding in our thesis is that it is possible to design an anonymous, scalable payment system using only cryptographic hashes, digital signatures and elliptic curve arithmetic. These basic constructs were found to still be very demanding of these mobile devices’ computational power. We wrote a benchmarking application and tested over 30 Android devices on their performance in cryptographic computations and payment protocol scenarios. It was found that the computational performance at present leads to some difficult tradeoffs for real-world applications. Nonetheless, we conclude that practical applications are within the realm of possibility. The contributions presented in this thesis are the following: • The design of a simple peer-to-peer payment protocol • An extension of this protocol in which a bank cannot trace payments without a trusted third party • An extension of this protocol in which multiple banks can issue coins • A mechanism by which multiple parties can share the responsibility of payer anonymization • A prototype application that demonstrates a viable medium for peerto- peer mobile communications for payments • Benchmark results of a large number of Android devices on cryptographic operations used in the presented payment protocols
Item Type:Essay (Master)
ING, Amsterdam, Netherlands
Faculty:EEMCS: Electrical Engineering, Mathematics and Computer Science
Subject:54 computer science
Programme:Computer Science MSc (60300)
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