Liveliness of the Interaction with the Banks

One can classify payment systems in two broad categories as described in [1]: online payments and off-line payments, depending on whether there is a need to contact a single (trusted) entity for the payment to take place (in addition to the transaction participants). Clearly, online payment systems require that a contact with a third- party, such as with an authentication or authorization server (e.g., a server of the bank confirming a transaction), is necessary whenever a payment is to take place. In contrast, in off-line systems, payments can be executed by requiring only the active participation of the payer and the payee. Credit card payments are examples of online payments, while prepaid card-based payments are prominent examples of off-line payments.

From a security perspective, off-line systems are vulnerable to doublespending attacks, where an adversary attempts to spend more than the available (off-line) balance (pretending that another off-line payment did not take place). Such attacks against fairness have been identified in the literature and resulted in the incorporation of a number measures to prevent/detect such threats. Among these measures, hardware-based approaches are the most widely used in order to deter double-spending in off-line payments (e.g., by utilizing smart cards). Another method to offer double-spending resistant off-line payments is to rely on nominal checks that have already been preapproved by a third-party to be received by the specific merchant [1]. Finally, additional methods are based on detection of doublespending acts or on tracing and punishing the double-spenders [3].