SSL Server Certificates and Online Payment Services

Executive Summary
Businesses that can manage and process e-commerce transactions can gain a competitive edge by reaching a worldwide audience, at very low cost. But the Web poses a unique set of trust issues, which businesses must address at the outset to minimize risk. Customers submit information and purchase goods or services via the Web only when they are confident that their personal information, such as credit card numbers and financial data, is secure.

The solution for businesses that are serious about e-commerce is to implement a complete e-commerce trust infrastructure. PKI cryptography and digital signature technology, applied via Secure Sockets Layer (SSL) digital certificates, provide the authentication, data integrity, and privacy necessary for e-commerce. Internet payment gateway systems provide online merchants with the ability to efficiently and securely accept and process a variety of online payments from customers.

VeriSign, Inc., offers the essential components of an Internet trust infrastructure to e-commerce businesses. By installing a VeriSign SSL Certificate on their Web servers, businesses can securely collect sensitive information online and increase business by giving their customers the confidence of knowing that payment transactions are safe. VeriSign Payment Services VeriSign Payflow Payment Services simplify e-commerce by providing payment connectivity over the Internet between buyers, sellers, and financial networks for transactions involving all major consumer credit card, debit card, electronic check, purchase card, and Automated ClearingHouse (ACH) transactions. VeriSign's Commerce Site solutions combine both SSL Certificates and Payflow Pro payment services, along with additional value-added features, to form a complete e-commerce trust infrastructure solution.

I. The E-Commerce Opportunity
A secure e-commerce Web site can provide businesses with powerful competitive advantages, including increased online retail sales as well as streamlined application processes for products such as insurance, mortgages, or credit cards. E-commerce credit card sales can be especially lucrative: according to independent analysts, cash transactions on the Internet will reach $9 billion in 2000, and $30 billion in 2005.

By offering products and services on the Web, businesses can gain unique benefits:
    • New customers: Anyone with an Internet connection is a potential customer: millions around the world are already using the Internet for business transactions. Web storefronts are open 24 hours a day, and require no investments in brick and mortar.
    • Cost-effective delivery channel: Many products and services, such as software or information, can be distributed directly to customers via the Web, enhancing the customer experience and increasing profitability by eliminating the shipping and overhead costs associated with order fulfillment.
    • Streamlined enrollment: Paper-based enrollment workflows are fraught with delays. Applications for insurance, a mortgage, or a credit card, for example, can be held up in the mail. And once received, application information must be entered into computer systems manually, a labor-intensive process that can introduce errors. By accepting applications via a secure Web site, businesses can speed application processing, reduce processing costs, and improve customer service.

    • Better marketing through better customer knowledge: Establishing a storefront on the Web positions enterprises for one-to-one marketing — the ability to customize products and services to individual customers rather than large market segments. The Web facilitates one-to-one marketing by enabling businesses to capture information about demographics, personal buying habits, and preferences. By analyzing this information, enterprises can target merchandise and promotions for maximum impact, tailor Web pages to specific consumers, and conduct effective, tightly focused marketing campaigns.
No business can afford to ignore this opportunity. But businesses also can't ignore the potential pitfalls. Before entering the fiercely competitive e-commerce arena, businesses must carefully assess and address the accompanying risks.

A. The Risks and Challenges of E-Commerce Trust
To succeed in the fiercely competitive e-commerce marketplace, businesses must become fully aware of Internet security threats, take advantage of the technology that overcomes them, and win customers' trust. Eighty-five percent of Web users surveyed reported that a lack of security made them uncomfortable sending credit card numbers over the Internet. The merchants who can win the confidence of these customers will gain their loyalty — and an enormous opportunity for expanding market share.

In person-to-person transactions, security is based on physical cues. Consumers accept the risks of using credit cards in places like department stores because they can see and touch the merchandise and make judgments about the store. On the Internet, without those physical cues, it is much more difficult to assess the safety of a business. Also, serious security threats have emerged. By becoming aware of the risks of Internet-based transactions, businesses can acquire technology solutions that overcome those risks:

    • Spoofing — The low cost of Web site creation and the ease of copying existing pages makes it all too easy to create illegitimate sites that appear to be published by established organizations. In fact, con artists have illegally obtained credit card numbers by setting up professional-looking storefronts that mimic legitimate businesses.
    • Unauthorized disclosure — When transaction information is transmitted "in the clear," hackers can intercept the transmissions to obtain customers' sensitive information.
    • Unauthorized action — A competitor or disgruntled customer can alter a Web site so that it refuses service to potential clients or malfunctions.
    • Eavesdropping — The private content of a transaction, if unprotected, can be intercepted en route over the Internet.
    • Data alteration — The content of a transaction can be not only intercepted, but also altered en route, either maliciously or accidentally. User names, credit card numbers, and dollar amounts sent "in the clear" are all vulnerable to such alteration.

B. The Goals of Implementing an E-Commerce Trust Infrastructure
To take advantage of the opportunities of e-commerce and avoid the risks of communicating and transacting business online, every business must address practical problems and questions involving privacy, security, and overall confidence in the underlying features of the system. Such concerns include:

"How can I be certain that my customers' credit card information is not accessible to online eavesdroppers when they enter into a secure transaction on the Web?"

"How can I reassure customers who come to my site that they are doing business with me, not with a fake set up to steal their credit card numbers?"

"Once I've found a way to authoritatively identify my business to customers and protect private customer information on the Web, what's the best way to let customers know about it, so that they can confidently transact business with me?"

"When customers feel confident enough to buy something from me online, how can I enable them to pay me easily using their credit cards or other payment methods?"

"How can I verify that customer's credit card information is valid?"

"What do I do with payment information once customers send it to me?"

The process of addressing these general security questions determine the fundamental goals of establishing an e-commerce trust infrastructure:

Authentication: Customers must be able to assure themselves that they are in fact doing business and sending private information with a real entity — not a "spoof" site masquerading as a legitimate bank or e-store.

Confidentiality: Sensitive Internet communications and transactions, such as the transmission of credit card information, must be kept private.

Data integrity: Communications must be protected from undetectable alteration by third parties in transmission on the Internet.

Nonrepudiation: It should not be possible for a sender to reasonably claim that he or she did not send a secured communication or did not make an online purchase.

II. The Solution: How to Build an Infrastructure for Trusted E-Commerce
The solution for meeting each of the goals above includes two essential components:

    • Digital certificates for Web servers, to provide authentication, privacy and data integrity through encryption
    • A secure online payment management system, to allow e-commerce Web sites to securely and automatically accept, process, and manage payments online Together, these technologies form the essential trust infrastructure for any business that wants to take full advantage of the Internet.

A. Overview: Public Key Cryptography & Digital Certificates
This section presents background technical information on cryptographic systems, including Public Key Cryptography, the system underlying Secure Sockets Layer (SSL) — the basis for every e-commerce trust infrastructure.

Encryption is the process of transforming information before communicating it to make it unintelligible to all but the intended recipient. Encryption employs mathematical formulas called cryptographic algorithms, or ciphers, and numbers called keys, to encrypt or decrypt information.

1. Symmetric Cryptography
Until recently, symmetric encryption techniques were used to secure information transmitted on public networks. Traditional symmetric cryptographic systems are based on the idea of a shared secret. In such a system, two parties that want to communicate securely first agree in advance on a single "secret key" that allows each party to both encrypt and decrypt messages.

Symmetric cryptography has several drawbacks. Exchanging secret keys is unwieldy in large networks. Furthermore, the sharing of secret keys requires both senders and recipients to trust, and therefore be familiar with, every person they communicate with securely. Also, symmetric systems require a secure channel to distribute the "secret" keys in the first place. If there is indeed such a secure channel, why not use it to send the entire secret message?

In today's Web-based systems involving many participants and transitory interactions with strong cryptography requirements, such symmetric key-based systems are highly impractical as a means for agreeing upon the necessary secrets to begin communicating securely.

This problem, the key agreement, or key distribution problem, is part of a larger problem that is central to the modern understanding of cryptographic systems — the key management problem. The key management problem described more fully below. Together, they represent the fundamental challenge in designing effective cryptography systems for modern computing systems. Symmetric key encryption plays an important role in the SSL protocol, along with asymmetric public key encryption.

2. Public-Key Cryptography
Today's public key, or asymmetric cryptography systems are a considerable improvement over traditional symmetric cryptography systems in that they allow two parties to exchange data privately in the presence of possible eavesdroppers, without previously agreeing on a "shared secret." Such a system is a called "asymmetric" because it based on the idea of a matched cryptographic key pair in which a cryptographic key is no longer a simple "shared secret" but rather is split into two subkeys, the private key and public key.

Abstractly, a participant wishing to receive encrypted communications using an asymmetric cryptography system will first generate such a key pair, keeping the private-key portion as a secret and the "publishing" the public-key portion to all parties that would like to encrypt data for that participant. Because encrypting data requires only access to the public key, and decrypting data requires the private key, such a system in principle can sidestep the first layer of complexity in the key management problem since no shared secret need be exchanged.

3. Modern Cryptography Systems: A Hybrid Approach
In fact, a combination of both public-key and traditional symmetric cryptography is used in modern cryptographic systems. The reason for this is that public-key encryption schemes are computationally intensive versus their symmetric key counterparts. Because symmetric key cryptography is much faster for encrypting bulk data, modern cryptography systems typically use public-key cryptography to solve the key distribution problem first, then symmetric key cryptography is used to encrypt the bulk data.

Such a scheme is used by today's SSL protocol for securing Web transactions, as well as by secure e-mail schemes such as S/MIME that are built into such products as Netscape Communicator and the Microsoft Internet Explorer. See "IV. SSL Server Certificates" below for more on SSL.

4. The Key Management Problem
Underlying every cryptographic system is a set of practical problems and questions involving privacy, security, and overall confidence in the underlying confidentiality features of the system. In principle, the techniques of asymmetric and symmetric cryptography are sufficient to resolve the security questions and properties described above. For example, today's Web browsers use the public key of a Web site in order to send credit card numbers over the Web; similarly, one can protect access to files and data using a private symmetric key to scramble the information before saving it.

However, in practice, each of these problems requires a "certified" public key in order to operate correctly without third parties being able to interfere. This leads to a second set of questions; for example:
"How can I be sure that the public key that my browser uses to send credit card information is in fact the right one for that Web site, and not a bogus one?"

"How can I reliably communicate my public keys to my correspondents so that they can rely on it to send me encrypted communications?"

What's needed in order to address such concerns is the notion of a "secure binding" between a given entity that participates in a transaction and the public key that is used to bootstrap secure communication with that entity using asymmetric public key cryptography. The next section describes how a combination of digital signatures and X.509 digital certificates (which employ digital signatures), including SSL certificates, fulfills this role in e-commerce trust systems.

5. Digital Signatures
Digital signatures are based on a combination of the traditional idea of data hashing with public-key based encryption. Most hash functions are similar to encryption functions; in fact, some hash functions are just slightly modified encryption functions. Most operate by grabbing a block of data at a time and repeatedly using a simple scrambling algorithm to modify the bits. If this scrambling is done repeatedly, then there is no known practical way to predict the outcome — it is not in general practical for someone to modify the original data in any way while ensuring that the same output will emerge from the hash function. These hash-based signature algorithms use a cryptographically secure hash function such as Message Digest 5 (MD-5) or Secure Hash Algorithm (SHA) to produce a hash value from a given piece of data.

Because the digital signature process is central to the idea of a digital certificate — and in turn, the digital certificate is the primary tool to ensure e-commerce security — it's useful to look at a diagram of the process:

Figure 1: Steps in forming and verifying a digitally signed message

The figure illustrates the steps taken by a sender in forming a digitally signed message as well as the steps a recipient takes in verifying that the signed message is valid.

The first step is to take the original message and compute a "digest" of the outgoing message using a hashing algorithm. The result is a "message digest," which is typically is depicted as a long string of hexadecimal digits (and manipulated by software as binary data). In the next step, the sender uses his private key to encrypt the message digest.

The original message content, together with the encrypted digest, forms a digitally signed message, as depicted in the center of the figure. This digitally signed message is suitable for delivery to the recipient. On receipt, the receiver verifies the digital signature using an inverse set of steps: first the encrypted digest is decrypted using the sender's public key. Next, this result is compared to an independent computation of the message digest value using the hashing algorithm. If the two values are the same, the message has been successfully verified.

Note that no actual encryption of the message content itself need take place. Only the digital signature itself is encrypted while the message is in transit (unless, of course there are privacy concerns, in which case the message content should be encrypted as well).

Why is a digital signature compelling evidence that only the intended signer could have created the message? For example, what if interlopers were to change the original message? It was not encrypted, after all, and could have been changed by a third party in transit. The answer is that if such a change had been made, then the decrypted, original message digest wouldn't have matched the recomputed one for the changed data in the message. Verification of the digital signature would fail. Similarly, the creation of a bogus signature is impractical because an interloper doesn't have the appropriate private key.

6. Digital Certificates
A digital certificate is an electronic file that uniquely identifies individuals and Web sites on the Internet and enables secure, confidential communications. It associates the name of an entity that participates in a secured transaction (for example, an e-mail address or a Web site address) with the public key that is used to sign communication with that entity in a cryptographic system.

Typically, the "signer" of a digital certificate is a "trusted third party" or "Certificate Authority" (CA), such as VeriSign, that all participants to the use of the such certificates agree is a point of secure storage and management of the associated private signing key. The CA issues, creates, and signs certificates as well as possibly playing a role in their distribution.

Using digital certificates simplifies the problem of trusting that a particular public key is in fact associated with a participating party, effectively reducing it to the problem of "trusting" the associated CA service. Digital certificates therefore can serve as a kind of digital passport or credential. This approach represents an advance in the key management problem because it reduces the problem of bootstrapping trust to the problem of setting up (or in today's marketplace, selecting as a vendor) the appropriate CA functionality. All parties that trust the CA can be confident that the public keys that appear in certificates are valid.

a. Example: Use of Signer Certificates in Netscape Communicator (v4.05 & later)
Digital certificates already play a fundamental role in Internet-based cryptography systems. For example, consider the case of a secure Web transaction that takes place when a user visits a Web storefront to make a credit card purchase. When the user's browser accesses a secure page, a public key from the Web store has already been delivered to the client browser in the form of an X.509 digital certificate. All this happens transparently to the browser user at the time the secure connection is set up.

The browser trusts the certificate because it is signed, and the browser trusts the signature because the signature can be verified. And why can it be verified? Because the signer's public key is already embedded in the browser software itself. To see this in the particular case of Netscape Communicator, begin by clicking on the "Security" icon on the main toolbar.

Figure 2: The "Security" Toolbar button in Netscape Communicator v4.0

Under "Certificates" choose "Signers," and scroll down the list. A window similar to the following should appear:

Figure 3: The list of certificate signers hard-coded
to be trusted in Netscape Communicator

Next, select a particular certificate and click on the "Edit" button. A display similar to the following should appear:

Figure 4: A VeriSign CA certificate embedded in Netscape Communicator

This is a representation of an X.509 digital certificate. Although X.509 certificates come in three different versions, version 3 certificates, such as the one displayed here, are the ones that are most commonly encountered in today's cryptography systems. Such a certificate consists of the following fields to identify the owner of the certificate as well as the trusted CA that issued the certificate:

    • version
    • serial number
    • signature algorithm ID
    • issuer name
    • validity period
    • subject (user) name
    • subject public-key information
    • issuer unique identifier (version 2 and 3 only)
    • subject unique identifier (version 2 and 3 only)
    • extensions (version 3 only)
    • digital signature for the above fields
Figure 5: The fields of a X.509 digital certificate

Although only a few of these fields are shown in Figure 4 (version, serial number, issuer name, and subject name) correspond to the display elements in Figure 4, these basic elements give an idea of what such a typical certificate contains.

A more detailed dump of raw certificate content looks like this:

Figure 6: The fields of a X.509 digital certificate

In the next section, we describe how SSL digital certificates for Web servers apply cryptographic techniques to secure e-commerce Web sites.

IV. SSL Server Certificates
The practical means of implementing PKI and digital signatures are via Web server certificates that enable authentication and SSL encryption. SSL certificates form the basis of an Internet trust infrastructure by allowing Web sites to offer safe, secure information exchange to their customers. SSL server certificates satisfy the need for confidentiality, integrity, authentication, and nonrepudiation.

A. SSL Defined
Secure Sockets Layer (SSL), originally developed by Netscape Communications, is an information technology for securely transmitting information over the Internet. The SSL protocol has become the universal standard on the Web for authenticating Web sites to Web browser users, and for encrypting communications between browser users and Web servers.

Server certificates are available from Certificate Authorities (CAs) such as VeriSign — trustworthy, independent third parties that issue certificates to individuals, organizations, and Web sites. CAs use thorough verification methods to ensure that certificate users are who they claim to be before issuing them. CA's own self-signed SSL digital certificates are built into all major browsers and Web servers, including Netscape Communicator and Microsoft Internet Explorer, so that simply installing a digital certificate on a Web server enables SSL capabilities when communicating with Web browsers.

SSL server certificates fulfill two necessary functions to establish e-commerce trust:

    • SSL server authentication: Server certificates allows users to confirm a Web server's identity. Web browsers automatically check that a server's certificate and public ID are valid and have been issued by a certificate authority (CA) — such as VeriSign — included in the list of trusted CAs built into browser software. SSL server authentication is vital for secure e-commerce transactions in which users, for example, are sending credit card numbers over the Web and first want to verify the receiving server's identity.
    • SSL encryption: SSL server certificates establish a secure channel that enables all information sent between a user's Web browser and a Web server to be encrypted by the sending software and decrypted by the receiving software, protecting private information from interception over the Internet. In addition, all data sent over an encrypted SSL connection is protected with a mechanism for detecting tampering: that is, for automatically determining whether the data has been altered in transit. This means that users can confidently send private data, such as credit card numbers, to a Web site, trusting that SSL keeps it private and confidential.

B. How SSL Server Certificates Work
SSL Certificates take advantage of SSL to work seamlessly between Web sites and visitors' Web browsers. The SSL protocol uses a combination of asymmetric public key encryption and faster symmetric encryption.

The process begins by establishing an SSL "handshake" — allowing the server to authenticate itself to the browser user, and then permitting the server and browser to cooperate in the creation of the symmetric keys used for encryption, decryption, and tamper detection:

1. A customer contacts a site and accesses a secured URL: a page secured by a SSL Certificate (indicated by a URL that begins with "https:" instead of just "http:" or by a message from the browser). This might typically be an online order form collecting private information from the customer, such as address, phone number, and credit card number or other payment information.

2. The customer's browser automatically sends the server the browser's SSL version number, cipher settings, randomly generated data, and other information the server needs to communicate with the client using SSL.

3. The server responds, automatically sending the customer's browser the site's digital certificate, along with the server's SSL version number, cipher settings, etc.

4. The customer's browser examines the information contained in the server's certificate, and verifies that:
a. The server certificate is valid and has a valid date
b. The CA that issued the server been signed by a trusted CA whose certificate is built into the browser
c. The issuing CA's public key, built into the browser, validates the issuer's digital signature
d. The domain name specified by the server certificate matches the server's actual domain name

If the server cannot be authenticated, the user is warned that an encrypted, authenticated connection cannot be established.
5. If the server can be successfully authenticated, the customer's Web browser generates a unique "session key" to encrypt all communications with the site using asymmetric encryption.
6. The user's browser encrypts the session key itself with the site's public key so that only the site can read the session key, and sends it to the server.
7. The server decrypts the session key using its own private key.
8. The browser sends a message to the server informing it that future messages from the client will be encrypted with the session key.
9. The server then sends a message to the client informing it that future messages from the server will be encrypted with the session key.
10. An SSL-secured session is now established. SSL then uses symmetric encryption, (which is much faster than asymmetric PKI encryption) to encrypt and decrypt messages within the SSL-secured "pipeline."
11. Once the session is complete, the session key is eliminated.
It all takes only seconds and requires no action by the user.

The Netscape Navigator and the Microsoft Internet Explorer browsers have built-in security mechanisms to prevent users from unwittingly submitting their personal information over insecure channels. If a user tries to submit information to an unsecured site (a site without an SSL server certificate), the browsers will, by default, show a warning:

In contrast, if a user submits credit card or other information to a site with a valid server certificate and an SSL connection, the warning does not appear. The secure connection is seamless, but visitors can be sure that transactions with a site are secured by looking for the following cues:

    • The URL in the browser window displays "https" at the beginning, instead of http.
    • In Netscape Communicator, the padlock in the lower left corner of the Navigator window will be closed instead of open.
    • In Internet Explorer, a padlock icon appears in the bar at the bottom of the IE window.
1. SSL Strengths: 40-bit and 128-bit SSL
SSL comes in two strengths, 40-bit and 128-bit, which refer to the length of the session key generated by every encrypted transaction. The longer the key, the more difficult it is to break the encryption code. 128-bit SSL encryption is the world's strongest: according to RSA Labs, it would take a trillion trillion years to crack using today's technology. 128-bit encryption is approximately 3 X 1026 stronger than 40-bit encryption.

Microsoft and Netscape offer two versions of their Web browsers, export and domestic, that enable different levels of encryption depending on the type of SSL server certificate with which the browser is communicating.

    • 40-bit SSL server certificates (such as VeriSign's SSL Certificates) enable 40-bit SSL when communicating with export-version Netscape and Microsoft Internet Explorer browsers (used by most people in the U.S. and worldwide), and 128-bit SSL encryption when communicating with domestic-version Microsoft and Netscape browsers.
    • 128-bit SSL server certificates (such as VeriSign's Global Server IDs) enable 128-bit SSL encryption — the world's strongest — with both domestic and export versions of Microsoft® and Netscape® browsers.
In order to fully enable 128-bit encryption with a Global Server ID, it's important to generate the right kind of private key during the process of obtaining a SSL Certificate. An important step in the process is generating a Certificate Signing Request within the Web server software. In generating a CSR, Web server administrators should be careful to select a 1024-bit private key, which enables the Global Server ID to establish 128-bit SSL encryption, rather than a 512-bit private key, which enables only 40-bit encryption.

Netscape users can follow these steps to see what level of encryption is protecting their transactions:

    • Go to the secure Web page you want to check.
    • Click the Security button in the Navigator's toolbar. The Security Info dialog box indicates whether the Web site uses encryption.
    • If it does, click the Open Page Info button to display more information about the site's security features, including the type of encryption used.
    • You can also check to see which level of SSL is activated on your Web server by following these steps:
    • Using a 128-bit client, such as the domestic version of the Netscape Navigator, click on Options/Security Preferences.
    • Under the enable SSL options, click on Configure for both SSL 2 and SSL 3. Make sure acceptance for the 40 and 56 bit encryption ciphers are turned off.
    • Try to access the site. If it using less than 128 bit security, then you will receive an error in your browser window: "Netscape and this server cannot communicate securely because they have no common encryption methods."
IE users can find out a Web site's encryption level by following these steps:
    • Go to the Web site you want to check.
    • Right-click on the Web site's page and select Properties.
    • Click the Certificates button.
    • In the Fields box, select "Encryption type." The Details box shows you the level of encryption (40-bit or 128-bit. See the following section for more information about SSL encryption levels).

E-businesses may choose to simplify the process of certificate checking for site visitors by describing the security measures they have implemented in a Security and Privacy statement on their sites. Sites that use VeriSign SSL Certificates can also post the Secure Site Seal on their home page, security statement page, and purchase pages. The Seal is a widely recognized symbol of trust that enables site visitors to check certificates in real time from VeriSign with one click (see "VII. The VeriSign Advantage" below for more information about the Seal).

2. SGC and 128-bit Step-up
To ensure that strong 128-bit encryption protects e-commerce transactions for all users, businesses should install 128-bit IDs, such as VeriSign's Global Server IDs, on their servers. However, the export browsers that permit only 40-bit encryption with 40-bit SSL server certificates will allow strong 128-bit encryption when interacting with 128-bit server certificates because these certificates are equipped with a special extension that enable "Server Gated Cryptography (SGC)" for Microsoft browsers and "International Step-Up" for Netscape browsers.

The extension enables 128-bit encryption with export-version browsers by prompting two "handshakes" when a user's browser accesses a page protected by a Global Server ID. When an export-version Netscape or Microsoft browser connects to the Web server, the browser initiates a connection with only a 40-bit cipher. When the server certificate is transferred, the browser verifies the certificate against its built-in list of approved CAs. Here, it recognized that the server certificate includes the SGC or International Step-Up extension, and then immediately renegotiates the SSL parameters for the connection to initiate an SSL session with a 128-bit cipher. In subsequent connections, the browser immediately uses the 128-bit cipher for full-strength encryption.

C. Securing Multiple Servers and Domains with SSL
As organizations and service providers enhance their Web sites and extranets with newer technology to reach larger audiences, server configurations have become increasingly complex. They must now accommodate:

    • Redundant server backups that allow Web sites and extranets to maximize site performance by balancing traffic loads among multiple servers
    • Organizations running multiple servers to support multiple site names
    • Organizations running multiple servers to support a single site name
    • Service providers using virtual and shared hosting configurations
But in complex, multiserver environments, SSL server certificates must be used carefully if they are to serve their purpose of reliably identifying sites and the businesses operating them to visitors and encrypt e-commerce transactions — establishing the trust that customers require before engaging in e-commerce.

When used properly in an e-commerce trust infrastructure equipped with multiple servers, SSL server certificates must still satisfy the three requirements of online trust:

1. Client applications, such as Web browsers, can verify that a site is protected by an SSL server certificate by matching the "common name" in a certificate to the domain name (such as www.verisign.com) that appears in the browser. (Certificates are easily accessible via Netscape and Microsoft browsers).

2. Users can also verify that the organization listed in the certificate has the right to use the domain name, and is the same as the entity with which the customer is communicating.

3. The private keys corresponding to the certificate, which enable the encryption of data sent via Web browsers, are protected from disclosure by the enterprise or ISP operating the server.

1. The Certificate Sharing Problem
VeriSign recommends that, to satisfy the requirements of Internet trust, one SSL server certificate be used to secure each domain name on every server in a multi-server environment, and that the corresponding private keys be generated from the hosting server.

Some enterprises or ISPs practice certificate sharing, or using a single SSL server certificate to secure multiple servers. Organizations use certificate sharing in order to secure back-up servers, ensure high-quality service on high-traffic sites by balancing traffic among several servers, or, in the case of ISPs and Web hosts, to provide inexpensive SSL protection to price-sensitive customers. However, as described in the following section, certificate-sharing configurations do not satisfy the fundamental requirements of Internet trust.

2. VeriSign Recommendations for Implementing SSL on Multiple Servers
Here are some common shared certificate configurations and VeriSign's recommendations for addressing them to most effectively reinforce an e-commerce trust infrastructure:

Fail-Safe Backup: Redundant servers, not used simultaneously
Certificate sharing is permissible. However, when the back-up server is not under the same control as the primary server, the private key cannot be adequately protected, and a separate certificate should be used for each server.

Load Balancing: Multiple sites with different common names on multiple servers
To prevent browsers from detecting that the URL of the site visited differs from the common name in the certificate, and to protect the security of private keys, a different certificate should be used for each server/domain name combination.

Load Balancing: Multiple sites with the same common name on multiple servers
Instead of jeopardizing private key functionality by copying the key for multiple servers, a different certificate should be used for each server. Each certificate may have the same common name and organizational name, but slightly different organizational unit values.

ISP Shared SSL: One certificate issued to an ISP's domain, used on multiple servers by multiple Web sites
This prevents site visitors from verifying that the site they are visiting is the same as the site protected by the certificate and listed in the certificate itself. Each site's server should have its own certificate. Or merchants must inform their customers that site encryption is provided by the ISP, not the merchant, and the ISP must guarantee the services of all the hosted companies whose sites use shared SSL.

Name-Based Virtual Hosting: An ISP or Web Host provides each hosted customer with a unique domain name, such as customername.isp.com.
If the same certificate is used for each domain name, browsers will indicate that the site domain name does not match the common name in the certificate. To solve this problem, a "wildcard" certificate of the form *.isp.com is required to properly serve the multi-hostname configuration without creating browser mismatch error messages. (VeriSign offers wildcard certificates on a case-by-case basis, and they are subject to certain additional licensing terms and conditions. For more information, please contact shared-ssl@verisign.com.)

For a complete explanation of VeriSign's solutions for securing multiple Web server and domain configurations, please see our white paper at http://www.verisign.com/rsc/wp/certshare/certshare.pdf.

Next, we examine the second key component of an Internet trust infrastructure: secure online payment management.

V. Online Payment Services
Once businesses have built a Web site and implemented SSL certificates to authenticate themselves to customers and encrypt communications and transactions, they must address another crucial component of an e-commerce infrastructure: enabling customers to easily pay for products and services online, and processing and managing those payments in conjunction with a complex network of financial institutions.

Today's fragmented Internet payment systems often connect online merchants to banks via privately operated, point-to-point payment networks. In 1998, for example, over 5 billion electronic payment transactions — originating from approximately 2 million merchant locations and representing over $250 billion in merchant dollar volume — were passed over leased lines and non-Internet interfaces to a single transaction processor (First Data Corporation).

This situation is rapidly changing. Internet commerce is entering an accelerated growth phase. IDC estimates worldwide e-commerce revenues will increase to $218 billion in 2000. Behind each of these Internet purchases is a payment transaction. However, traditional payment systems have proven to be ill equipped to manage the costs and complexity of transitioning and enabling transactions over the Internet. As a result, only a fraction of today's potentially automated e-commerce transactions are currently enabled for Internet payment. The situation is particularly acute in the B2B payments arena — today, most B2B systems stop short of enabling actual payment execution on the Web.

Demand is therefore high for a simpler, "Internet payment gateway" approach that provides easier Internet connectivity between buyers, sellers, and the financial networks that move money between them. A truly flexible Internet payment gateway must support multiple payment instruments, connect to all relevant back-office payment processors, and be packaged for easy integration into front-office Web applications. Ideally, the gateway should also offer uniform interfaces to payment functionality, permitting e-businesses to deploy payment applications that can be easily switched between alternative financial instruments, institutions, and payment processors. And to form part of a complete e-commerce trust infrastructure, the gateway must assure fail-safe security for payment data as it passes from customer to Web site and through the back-end processing system.

Some merchants may build an Internet payment gateway themselves, or purchase a software-based solution. However, according to the Gartner Group, most e-merchants have transaction volumes that do not justify the expense of bringing the process in-house, and are opting to outsourced, ASP solutions.

A. The Internet Payment Processing System
Understanding how best to address the need for Internet payment gateway services requires first briefly examining the participants in an Internet payment processing system.

Participants in a typical online payment transaction include:

    • The customer: typically, a holder of a payment card — such as a credit card or debit card — from an issuer.
    • The issuer: a financial institution, such as a bank, that provides the customer with a payment card. The issuer is responsible for the cardholder's debt payment.
    • The merchant: the person or organization that sells goods or services to the cardholder via a Web site. The merchant that accepts payment cards must have an Internet Merchant Account with an acquirer.
    • The acquirer: a financial institution that establishes an account with a merchant and processes payment card authorizations and payments. The acquirer provides authorization to the merchant that a given card account is active and that the proposed purchase does not exceed the customer's credit limit. The acquirer also provides electronic transfer of payments to the merchant's account, and is then reimbursed by the issuer via the transfer of electronic funds over a payment network.
    • The payment gateway: This function, operated by a third-party provider, processes merchant payments by providing an interface between the merchant and the acquirer's financial processing system.
    • The processor: a large data center that processes credit card transactions and settles funds to merchants, connected to the merchant on behalf of an acquirer via a payment gateway.

The basic steps of an online payment transaction include the following:

1. The customer places an order online by selecting items from the merchant's Web site and sending the merchant a list. The merchant often replies with an order summary of the items, their price, a total, and an order number.

2. The customer sends the order to the merchant, including payment data. The payment information is usually encrypted by an SSL pipeline set up between the customer's Web browser and the merchant's Web server SSL certificate.

3. The merchant requests payment authorization from the payment gateway, which routes the request to banks and payment processors. Authorization is a request to charge a cardholder, and must be settled for the cardholder's account to be charged. This ensures that the payment is approved by the issuer, and guarantees that the merchant will be paid.

4. The merchant confirms the order and supplies the goods or services to the customer.

5. The merchant requests payment, sending the request to the payment gateway, which handles the payment processing with the processor.

6. Transactions are settled, or routed by the acquiring bank to the merchant's acquiring bank for deposit.

B. VeriSign Payflow Payment Services
VeriSign Payflow Payment Services offers the most effective way to streamline the flow of all kinds of payments through this complex system — quickly, efficiently, and above all, securely. Payflow simplifies e-commerce by providing payment connectivity over the Internet between buyers, sellers, and financial networks. VeriSign uses a client server architecture to process transactions: the client is installed on the merchant's site and integrated with the merchant's e-commerce application. The client software establishes a secure link with the VeriSign processing server using an SSL connection to transmit encrypted transaction requests. The VeriSign server transmits the request over a private network to the appropriate financial processing network. When the authorization response is received via the financial processing network, the server returns the response to the merchant's client, which then completes the transaction by sending an acknowledgment to the server. Typical transactions occur within 3 seconds.

By partnering with VeriSign, merchants gain the ability to free themselves from point-to-point and difficult-to-integrate payment solutions, reaping the benefits of an integrated payment platform designed specifically for the Internet. Payflow supports all major consumer credit card, debit card, electronic check, purchase card, and Automated ClearingHouse (ACH) transactions. (ACH is a nationwide, wholesale electronic payment and collection system that serves as a method of transferring funds between banks via the Federal Reserve System.)

Its robust and open architecture has been designed to support both business-to-consumer (B2C) and business-to-business (B2B) payment applications. It provides the industry's highest performance and reliability and is a highly scalable outsourced solution that can easily grow to hundreds of millions of transactions per month. VeriSign Payflow has proven to be considerably faster, more reliable and scalable than any other competing solution. Using VeriSign Payflow, a merchant can connect to most banks, transaction services, or forms of payment without worrying about the underlying technology. Customers can pay with a variety of financial instruments, including checking accounts, savings accounts, and credit cards, quickly and simply.

VeriSign Payflow hides the complexity of payment

Competitive design advantages of the VeriSign Payflow service include:

    • Open connectivity with almost all bank processors and payment types through unified interfaces
    • Pre-integration with the most popular e-commerce applications and forthcoming payment-enabled Internet appliances such as Personal Digital Assistants (PDAs)
    • Continuous maintenance of a TCP/IP network connection throughout each transaction until it either successfully completes or times out. Unlike most competing solutions, VeriSign Payflow's payment connection both enables a faster response times (averaging 2.2 seconds) and — through confirmation of transaction completion — elimination of uncertainty of transaction status.
    • High availability that exceeds 99.99 percent with dynamic load balancing and failover between all servers
    • An XML integration layer both on the server side for ease of integration with additional services (such as fraud screening), and on the merchant side for ease of integration into back office applications
    • A Software Development Kit (SDK) allowing for more advanced custom integration into e-commerce applications
On the merchant side, VeriSign's payment connectivity technology works with all major shopping carts and e-commerce systems. Merchants can select the shopping cart system and storefront system that best suits their needs and be confident that VeriSign can make the connections.

To the Internet merchant, VeriSign offers:
    • Lower connectivity cost: Connecting to the payment networks over the Internet through VeriSign costs less to set up and maintain than leased lines or modem connections.
    • Better connection quality: VeriSign manages high-bandwidth, fault-tolerant network connections to the processing networks.
    • More payment options: Merchants can add new payment types without having to install new software.
    • Increased flexibility: Merchants can switch banking relationships and continue to use the same installed software to process payments with the new bank.
On the processor side, VeriSign works with all of the major processing and bank networks. Again, the merchant just selects an appropriate shopping cart, e-commerce package, or VeriSign-provided software development kit and knows that VeriSign will make the necessary connections to the transaction processing services.

1. How Payment Processing Services Work
At the application level, VeriSign's payment processing services can be accessed in three ways:
    • Payflow-enabled e-commerce applications: Many off-the-shelf e-commerce applications are pre-enabled to use VeriSign's Payflow payment processing, giving merchants a complete solution that can be used out-of-the-box. VeriSign's broad third-party support and superior payment connectivity enables merchants to independently choose the best e-commerce application and the best payment processor for their business needs.
    • Payflow Link: A hosted order form service that makes payment processing as simple as adding Web links to a merchant's Web site. See "VI. VeriSign E-Commerce Trust Infrastructure Solutions" below for more on Payflow Link.
    • Payflow Pro SDK: A software development kit that gives merchants direct access to VeriSign's Payflow payment processing API via a "thin client" network service. See "VI. VeriSign E-Commerce Trust Infrastructure Solutions" below for more on Payflow Pro and the Payflow Pro SDK.

Through VeriSign's acquiring bank partners, merchants are also able to apply for merchant bank accounts during the registration process. In all cases, online registration and account management enables merchants to be up and running in minutes.

A look inside the VeriSign Payflow payment processing operations center

C. Payment Processing Backbone
The VeriSign payment client is a Secure Sockets Layer (SSL)-enabled communications agent that uses routing parameter inputs to locate and establish communications with a VeriSign transaction server. After a secure communication channel has been established, transaction data is passed to the VeriSign payment infrastructure for processing. VeriSign transaction communications have been designed to minimize message-handling errors by ensuring an uninterrupted, TCP-level communication stream between the client and the server. The VeriSign architecture has the highest performance in the industry. The average transaction response time is 2.2 seconds.

The following sequence of messages illustrates the communication stream during a typical transaction from a VeriSign-enabled client to the VeriSign Payment Services operations center.
    • The client opens an SSL connection to a server and sends all transaction data.
    • The server processes the transaction, sends a response back to the client.
    • The client sends an acknowledgment to the server indicating that the response was successfully received.
    • The connection is closed.
VeriSign Payment Services incorporate the following features to reinforce an e-commerce trust infrastructure:

1. Connectivity
VeriSign provides connectivity to more payment processors and supports more payment types than any other online payment solution provider.
PROCESSOR PAYMENT TYPES AVAILABLE

2. Scalability
VeriSign's transaction processing power can grow quickly, providing throughput and reliability as the transaction load grows from millions to hundreds of millions of transactions per month and beyond. VeriSign combines custom-developed, high-throughput server software with a load-balancing network architecture to deliver a solid payment Internet service explicitly intended for today's quickly growing e-commerce community.

3. Maximum Throughput
While many payment solutions have been implemented as "add-ons" to existing Web server platforms, VeriSign has built server software specifically designed for payment transactions. This provides significant advantages in three areas:
• Internal Resources: VeriSign server software incorporates a sophisticated threading model designed specifically to deliver maximum throughput for payment transactions. Signal and timer logic for handling payment transaction exceptions and errors is built into the server's kernel. File system access and logging are optimized for payment transactions.
• Database Resources: VeriSign uses state-of-the-art DBMS technology to store and log the transaction activity. It has kernel-level control of database logins and resources, which provides a level of performance tuning and error recovery that is not available to payment systems that are based on Web servers.
• Network Resources: Because the VeriSign server is "payment-aware" at its core, it can manage the complex dynamics of communicating with card processing networks. Effective load balancing is achieved both in the local processes and in coordination with peer servers to implement an array-wide throughput optimization strategy — in other words, VeriSign servers perform load balancing both internally and in relation to other transaction servers in their cluster. As transaction loads grow for a cluster, this advantage becomes increasingly important.
4. Load Balancing and Linear Growth
Highly available payment processing requires that individual transaction servers be both extremely reliable and efficient. To provide true scalability, it must be practical to add new server capacity on demand. VeriSign services are delivered through clusters:
• Payment Server Cluster: These machines run the VeriSign Payment Server and manage the processing of inbound transaction requests to the processing networks.
• Web Server Cluster: These servers provide Web application functionality associated with the payment services. VeriSign's merchant reporting and virtual terminal systems are provided here.
• Replicated Database Cluster: These machines host the database servers. This cluster is broken up into write-biased, read-biased, and replicator machines. Write-biased servers are configured for maximum throughput for new transactions and are used by default by the transaction servers. Read-biased servers are configured for maximum speed on queries and reports and are used by default by the Web servers. Replication machines manage the synchronization of the data between all of the local database machines in the cluster as well as other cluster and backup/archive services.
VeriSign provides quality service for immense numbers of transactions by ensuring that it has provided adequate service clusters and has sufficient bandwidth on the front side (Internet) and back side (banking networks) to accommodate the load.

VeriSign's current production cluster supports a nominal load of two million transactions per day. In practice, capacity is added well before it is needed. As a general rule, when a cluster reaches a nominal load of 30% of capacity or when there are frequent spikes above 50% of capacity, either new capacity is added to the cluster or a new cluster is added to the service.

5. Reliability
In addition to load balancing, VeriSign's server clusters also provide failure protection. When a cluster suffers a server failure, the transaction load is seamlessly redistributed to the remaining servers in the cluster. Hardware redundancy is also provided within each server for every important subsystem.

6. Security
One of VeriSign's fundamental design considerations is, of course, security. The hardware, software, and physical plant developed and used by VeriSign services are carefully coordinated with an aggressive set of best practices to provide maximum protection and integrity at the transport, system, and physical levels.

Transport Security
Transport security provides protects transaction messages between the VeriSign client and server. Most transactions sent from the VeriSign client to VeriSign's payment servers are sent over the Internet — a public network. To ensure that the contents of transactions are private and that they cannot be altered or embellished in any way, VeriSign uses the Secure Sockets Layer (SSL) protocol for all communications between clients and servers. Similarly, Web access to every VeriSign Web site that provides sensitive data is available only under the HTTPS protocol, which is the same SSL protocol used by the client, running on top of HTTP.

VeriSign has licensed RSA Security, Inc.'s cryptographic tools. These tools are the de facto standard for highly secure communications over the Internet and are widely regarded as the best available platform on which to build a secure client/server system. This means that transaction data sent by the merchant to the VeriSign server can be read and used only by the VeriSign server.

Additionally, VeriSign offers merchants the opportunity to identify a set of IP addresses or subnets that constitute valid transaction sources for a given merchant. This means that in addition to the protection afforded by SSL message encryption, the merchant can specify a range of IP addresses using a string (for example, 192.32.4.18-20 or 192.4.22.*) This specifies the valid IP addresses for the VeriSign payment server. Transactions that originate from unregistered IP addresses are logged as suspicious behavior for VeriSign's network monitoring tools to investigate. This allows the merchant to further validate and protect the transaction stream to the VeriSign service.

System Security
VeriSign payment services are protected by firewall systems based on an extremely conservative access strategy: VeriSign's payment services are isolated from all other services. VeriSign permits communication with the VeriSign payment server or secured Web servers only through SSL (port 443.) This means there is no backdoor access for email, FTP, DNS, ICMP, and so on, which are all security risks. The only data that can enter is SSL traffic. All access requires user name and password, IP address validation, or X.509 client authentication.

The VeriSign service is also protected on the "back side" — its array of network connections to the processing networks — by firewall systems that ensure that only authorized traffic from authorized sources gets through to VeriSign's payment servers.

Inside the server array, a layering strategy further isolates repositories that contain sensitive information. Best-of-breed intruder detection systems and network monitoring tools are manned on a 24x7 basis, providing instant notification of suspicious or unauthorized access, as well as automatic countermeasures and remedies.

Physical Security
VeriSign's measures for physically protecting its Payment Services include 24x7 card key customer access to data centers, 24x7 video surveillance and recording of the premises by security personnel, and 24x7 on-site security personnel

7. XML
In cooperation with selected e-commerce partners and industry standards bodies, VeriSign has built an XML integration and automation layer into its payment infrastructure. This layer provides uniform XML access to all payment-related services including payment execution, registration, and reporting.