Existing software proposals for electronic payments can be divided into “on-line” schemes that require participation of a trusted party (the bank) in every transaction and are secure against overspending, and the “off-line” schemes that do not require a third party and guarantee only that overspending is detected when vendors submit their transaction records to the bank (usually at the end of the day). We propose a new hybrid scheme that combines the advantages of both of the above traditional design strategies. It allows for control of overspending at a cost of only a modest increase in communication compared to the off-line schemes. Our protocol is based on probabilistic polling. During each transaction, with some small probability, the vendor forwards information about this transaction to the bank. This enables the bank to maintain an accurate approximation of a customer’s spending. The frequency of polling messages is related to the monetary value of transactions and the amount of overspending the bank is willing to risk. The probabilistic polling model creates a natural spectrum bridging the existing on-line and off-line electronic commerce models. For transactions of high monetary value, the cost of polling approaches that of the on-line schemes, but for micropayments, the cost of polling is a small increase over the traffic incurred by the off-line schemes.
|Original language||English (US)|
|Title of host publication||Financial Cryptography - 1st International Conference, FC 1997, Proceedings|
|Number of pages||19|
|State||Published - 2015|
|Event||1st International Conference on Financial Cryptography, FC 1997 - The Valley, Anguilla|
Duration: Feb 24 1997 → Feb 28 1997
|Name||Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)|
|Other||1st International Conference on Financial Cryptography, FC 1997|
|Period||2/24/97 → 2/28/97|
Bibliographical noteFunding Information:
Work partly done during an internship at AT&T Labs - Research. Partly supported by a DARPA grant.
© Springer-Verlag Berlin Heidelberg 1997.