all

Slide1 : Figure 18.1 Conventional Cryptography KEY SIGNER RECIPIENT PLAINTEXT CIPHERTEXT PLAINTEXT


Slide2 : Figure 18.2 Asymmetric Cryptography SIGNER RECIPIENT PLAINTEXT CIPHERTEXT PLAINTEXT PUBLIC KEY PRIVATE KEY


Slide3 : Figure 18.3 Message Digest DIGEST DIGEST DIGEST PLAINTEXT PLAINTEXT PLAINTEXT + SAME?


Slide4 : Figure 18.4 Digitally Signed Documents PUBLIC KEY PRIVATE KEY Plaintext Plaintext Plaintext Encrypt Decrypt Signature Verify? One-way Hash Function One-way Hash Function Step 1 Step 2 Step 3 Step 5 Step 6 Step 4


Slide5 : Step 1: Signer uses one-way hash function to create message digest from plaintext. Step 2: Singer encrypts message digest with private key to create signature. Step 3: Signer sends plaintext and signature to recipient. Step 4: Recipient uses one-way has function to create message digest from plaintext. Step 5: Recipient decrypts signature with public key to create message digest. Step 6: Recipient compares message digest generated by one-way hash function to message digest generated by public key.


Slide6 : Figure 18.5 Certificate Authority PUBLIC KEY PRIVATE KEY PUBLIC KEY CA Certificate Request Certificate Issue Plaintext Plaintext Sign (Private Key) Signature + Signature + Verify? Step 1 Step 2 Step 3 Step 5 Step 6 Step 4 This is signer’s public key Isl Certificate Authority


Slide7 : Step 1: Signer creates its own public key and private key. Step 2: Signer requests certificate from certification authority (CA). Step 3: CA issues a certificate of signer’s public key, signed by CA’s private key. Step 4: Singer uses one-way hash function to create message digest from plaintext (Step 1 from Figure 15.4) and encrypts message digest with private key to create signature (Step 2 from Figure 15.4). Step 5: Signer sends plaintext and signature to recipient (Step 3 form Figure 15.4). Step 6: Recipient uses one-way hash function to create message digest from plaintext (Step 4 from Figure 15.4), decrypts signature with public key to create message digest (Step 5 from Figure 15.4), and compares the two message digests (Step 6 from Diagram 15.4).


Slide8 : Figure 18.6 SSL Consumer 1 2 3 4 Root CA Cert installed in browser CA cert for Merchant Sig Merchant Cert to Consumer Browser Symmetric key encrypted with Merchant public key to encrypt communications


Slide9 : Figure 26.1 Direct Presentment Step 2 Step 3 Step 1 Step 1: Payee provides goods and services to payor; payor gives check to payee. Step 2: Payee presents check to payor bank; payor bank gives cash to payee. Step 3: Payor bank removes funds from payor’s account.


Slide10 : Figure 26.2 Clearinghouse Collection Step 1 Step 4 Step 3 Step 2 Step 3 Step 2 Step 1 Step 4 Step 1: Customers deposit checks at their banks. Their banks credit their accounts. Step 2: Banks send to the clearinghouse checks they have received for deposit. Clearinghouse credits banks for those checks. Step 3: Clearinghouse sends to banks checks drawn on them. Clearinghouse debits banks for those checks. Step 4: Banks debit customer accounts for checks received from clearinghouse.


Slide11 : Figure 26.3 Direct-Send Collection S.F. Bank N.Y. Bank S.F. Payor N.Y. Payee S.F. Payee N.Y. Payor Step 1 Step 1 Step 2 Step 2 Step 3 Step 4 Step 4 Step 1: Payees provide goods and services to payors. Payors give checks to payees. Because the process proceeds simultaneously on checks in each city, it can apply when a New York payor sends a check to a San Francisco payee and also when a San Francisco payor sends a check to a New York payee. Step 2: Payees deposit checks (one in San Francisco and one in New York). Their banks credit their accounts. Step 3: Each bank sends to the other the checks the first bank has received that are drawn on the other. Specifically, the San Francisco bank sends to New York the checks that the San Francisco bank has received that are drawn on the New York bank; the New York bank sends to San Francisco the checks that the New York bank has received that are drawn on the San Francisco bank. Funds are transferred to settle the difference in amount. Step 4: Both banks remove funds from the payors’ accounts: the San Francisco bank from its customers and the New York bank from its customers.


Slide12 : Figure 26.4 Federal-Reserve Collection Payor Bank Federal Reserve Bank Payee Payor Step 1 Step 2 Step 5 Step 3 Step 4 Step 1: Payee provides goods and services to payor; payor gives check to payee. Step 2: Payee deposits check. Depositary bank credits payee’s account. Step 3: Depositary bank sends check to the Federal Reserve bank. The Federal Reserve bank credits the depositary bank for the check. Step 4: The Federal Reserve bank sends the check to the payor bank and debits it for the check. Step 5: The payor bank debits the payor for the check.


Slide13 : Figure 27.2 POS Conversion Customer’s Bank Merchant’s Bank Customer Merchant Step 1 Step 2 Step 3 Step 4 Step 4 Step 5 Step 1: The Customer gives a check to the Merchant. The Merchant runs the check through a reader (capturing the information on the MICR line of the check) and returns the paper check to the Customer. Step 2: The Merchant sends to its bank a message including both the amount of the transaction and the data from the check about the Customer’s bank account. Step 3: The Merchant’s Bank sends an ACH debit entry to the Customer’s Bank. Step 4: The Customer’s Bank responds to that entry by removing funds from the Customer’s account and sending them to the Merchant’s Bank (through the ACH network). Step 5: The Merchant’s Bank credits the Merchant’s account.


Slide14 : Figure 28.1 ACH “Checks” Customer’s Bank Merchant’s Bank Customer Merchant Step 1 Step 3 Step 4 Step 4 Step 5 Step 1: The Customer sends payment information to the ACH Provider (probably through a link at the merchant’s website). The information should include the information from the MICR line of Customer’s check (the ABA routing number of the Customer’s Bank and the Customer’s account number at the bank). Step 2: Based on the commitment to pay represented by that information, the Merchant completes the transaction. It might ship the goods at that time, or it might wait a few days to receive payment. Step 3: The ACH Provider sends the ACH debit entry to the Customer’s Bank. Step 4: The Customer’s Bank responds to that entry by removing funds form the Customer’s account and sending them to the Merchant’s Bank (through ACH network). Step 2 Step 1


Slide15 : Figure 30.1 Using Electronic Money Issuer Merchant’s Bank Customer Merchant Step 1 Step 2 Step 3 Step 5 Step 1: Customer opens account and creates ecoins. Step 2: Customer sends coins to Merchant. Step 3: Merchant confirms authenticity of coins by communication with Issuer. Step 4: Merchant releases product to Customer. Step 5: Issuer sends funds to account at Merchant’s Bank. Step 4


Slide16 : At Sight Any City, Ks. May 2, 1997 Pay to the order of Seller Ten Thousand and no/100 U.S. Dollars Through Banco di Roma Buer Seller Any City, Italy Exporter Figure 31.1 Sight Draft for Documentary Collection


Slide17 : Figure 31.2 Documentary-Draft Transaction Seller’s Bank (Remitting Bank) Buyer’s Bank (Presenting Bank) Seller (Manufacturer) Buyer (Importer) Carrier 2. Draft w/B/L 3. Draft w/B/L 6. $ 6. $ 5. $ 5. B/L 1. Goods 7. B/L 7. Goods 1. B/L


Slide18 : Step 1: Seller delivers the goods to Carrier; Carrier issues a bill of lading to Seller. Step 2: Seller sends the draft and the bill of lading to Seller’s Bank. Step 3: Seller’s Bank sends the draft and the bill of lading to Buyer’s Bank. Step 4: Buyer’s Bank presents the draft to Buyer. Step 5: Buyer pays for the goods and receives the bill of lading. Step 6: Buyer’s Bank forwards payment to Seller’s Bank and Seller’s Bank forwards payment to Seller. Step 7: Buyer gives the bill of lading to Carrier; Carrier releases the goods to Buyer.


Slide19 : Figure 31.3 Issuing the Letter of Credit 5. Goods 3. Issues Letter of Credit 4. Informs Seller Letter of Credit Has Been Issued 2. Applies for Letter of Credit 1. Contract Calling for Payment by Letter of Credit


Slide20 : Figure 31.4 Payment by Letter of Credit 1. Shipment of Goods 5. Reimbursement 3. Documents Evidencing Shipment 2. Documents Evidencing Shipment 4. Payment 6. Payment


Slide21 : Figure 36.1 Software Leasing Financier Licensor User Payments over time One-time payment Software License


Slide22 : Figure 36.2 Article 9 View of General Intangibles Financier/ Secured Party Licensor/ Account Debtor User/ Debtor Promissory Note $ Software License


Slide23 : Figure 36.3 Finance Licensing Financier Licensor User Payments over time One-time payment Software License Sublicense