Transferable E-cheques: An Application of Forward-Secure Serial Multi-signatures

Abstract

With the modern world going on-line for all businesses, we need to transact with various business organizations all over the world using different modes of payment obtained through various Financial Institutions. We have considered the following bank transaction. A person X having an account in bank C issued a cheque for certain amount in favor of a person Y having an account in bank B. But, Y wants to issue a cheque for the same amount favoring Z. In normal course, Y need to deposit the cheque in bank B, wait for clearance and then issue a cheque in favor of Z. This consumes time as bank B sends the cheque to bank C for clearance.

In this paper, we propose a scheme in which a cheque is transferable. That is, the cheque in favor of Y can be reissued for the same amount to Z without presenting in the bank. Person Z can deposit the cheque directly in his bank, thus saving time and work load on banks. Further, the scheme can be used to transfer the cheque to any number of persons and only the last person deposits in the bank. In view of this, e-cheque can be used as e-cash to a limited extent. Our scheme is based on multi-signatures. We have augmented the multi-signature scheme to provide forward security. This guarantees the security of cheques signed in the past even if the signer's secret key is exposed today. We propose two flavors of Forward-secure multi-signatures, one based on Elgamal signatures and the other based on Digital Signature Algorithm.