Some surprising data isn’t encrypted in ATM transfers

From “Triple DES Upgrades May Introduce New ATM Vulnerabilities” (Payment News: 13 April 2006):

In a press release today, Redspin, an independent auditing firm based in Carpinteria, CA, suggests that the recent mandated upgrades of ATMs to support triple DES encryption of PINs has introduced new vulnerabilities into the ATM network environment – because of other changes that were typically made concurrently with the triple DES upgrades.

<begin press release>Redspin, Inc. has released a white paper detailing the problem. Essentially, unencrypted ATM transaction data is floating around bank networks, and bank managers are completely unaware of it. The only data from an ATM transaction that is encrypted is the PIN number.

“We were in the middle of an audit, looking at network traffic, when there it was, plain as day. We were surprised. The bank manager was surprised. Pretty much everyone we talk to is surprised. The card number, the expiration date, the account balances and withdrawal amounts, they all go across the networks in cleartext, which is exactly what it sounds like — text that anyone can read,” explained Abraham.

Ironically, the problem came about because of a mandated security improvement in ATMs. The original standard for ATM data encryption (DES) was becoming too easy to crack, so the standard was upgraded to Triple DES. Like any home improvement project, many ATM upgrades have snowballed to include a variety of other enhancements, including the use of transmission control protocol/Internet protocol (TCP/IP) — moving ATMs off their own dedicated lines, and on to the banks’ networks. …

A hacker tapping into a bank’s network would have complete access to every single ATM transaction going through the bank’s ATMs.<end press release>