The Chip Authentication Program (CAP) is a MasterCard initiative and technical specification for using EMV banking smartcards for authenticating users and transactions in online and telephone banking. It was also adopted by Visa as Dynamic Passcode Authentication (DPA). The CAP specification defines a handheld device (CAP reader) with a smartcard slot, a numeric keypad, and a display capable of displaying at least 12 characters (e.g., a starburst display). Banking customers who have been issued a CAP reader by their bank can insert their Chip and PIN (EMV) card into the CAP reader in order to participate in one of several supported authentication protocols. CAP is a form of two-factor authentication as both a smartcard and a valid PIN must be present for a transaction to succeed. Banks hope that the system will reduce the risk of unsuspecting customers entering their details into fraudulent websites after reading so-called phishing emails.
Operating principle
The CAP specification supports several authentication methods. The user first inserts their smartcard into the CAP reader and enables it by entering the PIN. A button is then pressed to select the transaction type. Most readers have two or three transaction types available to the user under a variety of names. Some known implementations are: Code/identify Without requiring any further input, the CAP reader interacts with the smartcard to produce a decimal one-time password, which can be used, for example, to log into a banking website. Response This mode implements challenge–response authentication, where the bank's website asks the customer to enter a "challenge" number into the CAP reader, and then copy the "response" number displayed by the CAP reader into the web site. Sign This mode is an extension of the previous, where not only a random "challenge" value, but also crucial transaction details such as the transferred value, the currency, and recipient's account number have to be typed into the CAP reader.
The above noted transaction types are implemented using one of two modes. One of these modes has two forms in which it can operate, creating three distinct modes, though they are not named this way in the specification. Mode1 This is the mode for normal monetary transactions such as an online purchase through a merchant. A transaction value and currency are included in the computation of the cryptogram. If the card does not require it or the terminal does not support it, then both amount and currency are set to zero. Mode2 This mode may be useful for authenticating a user in which no transaction is taking place, such as logging into an Internet banking system. No transaction value, currency, or other data are included, making these responses very easy to precompute or reuse.
Mode1 sounds very much like a specific use of Mode2 with TDS, but there is a critical difference. In Mode1 operation, the transaction data (amount and currency type) are used in the cryptogram calculation in addition to all the values used in Mode2 without TDS, whereas Mode2 includes its transaction data in a successive step rather than including it in the cryptogram calculation step. If it were not for this difference, then all operations could be generalized as a single operation with varying optional transaction data.
Protocol details
In all three modes, the CAP reader asks the EMV card to output a data packet that confirms the cancellation of a fictitious EMV payment transaction, which involves the details entered by the user. This confirmation message contains a message authentication code (typically CBC-MAC/Triple DES) that is generated with the help of a card-specific secret key stored securely in the smartcard. Such cancellation messages pose no security risk to the regular EMV payment application, but can be cryptographically verified and are generated by an EMV card only after the correct PIN has been entered. It provided the CAP designers a way to create strong cryptographic evidence that a PIN-activated EMV card is present and has seen some given input data, without having to add any new software functions to EMV cards already in use.