Importing ZPK and ZMK into Thales Payshield 9000 HSM


Zone Master Key (ZMK) also known as an Interchange key (IK), is a key-encrypting key which is distributed manually between two communicating sites, within a shared network, in order that further keys can be exchanged automatically. The ZMK is used to encrypt keys of a lower level (e.g. ZPK) for transmission.

The ZMK is exchanged using secured methods and Split knowledge policy. The IK is split into two components that are sent by two separate physical couriers to two nominated Security Officers of the other party. This is one of the most secure way to do it since no single person gains knowledge of the clear ZMK.

Here is the detailed Process. please note values indicated here are for testing only, in live environment the values will be exchanged securely.

Build ZMK Key manually:

This key is generated by two components, lets call them K1 and K2. To obtain the ZMK Key,


Test values provided,

K1 (clear) = 6D6B E51F 04F7 6167 4915 54FE 25F7 ABEF
K2 (clear) = 6749 9B2C F137 DFCB 9EA2 8FF7 57CD 10A7

ZMK (clear) key = K1 XOR K2 = 0A227E33F5C0BEACD7B7DB09723ABB48; 
KCV = 05EE1D

Import ZMK into HSM

Key length [1,2,3]: 2
Key Type: 000
Key Scheme: U
Component type [X,H,E,S]: X
Enter number of components (2-9): 2
Enter component #1: 6D6BE51F04F76167491554FE25F7ABEF
Enter component #2: 67499B2CF137DFCB9EA28FF757CD10A7

Encrypted key: U E685 8676 0A16 3026 C297 1007 3AB2 D7BE 
Key check value: 05EE1D


Zone PIN Key (ZPK) also known as a A PIN Protection Key (PPK), is a data encrypting key which is distributed automatically and is used to encrypt PINs. For security and protocol reasons the HSM where this key generated, never exposes the ZPK in clear. But it can be exported using another key called ZMK (Interchange Key). In this context exports actually means use the ZMK Key to encrypt the ZPK and give back to the user.

Import ZPK

The following ZPK shared by communicating party, is encrypted under ZMK

ZPK encrypted under ZMK: AC4D3C5F603C1B502E5F45668A155C25

From the host application, send the A6 commands with required arguments as following,

HSM Command:



Atalla Variant = 00
Encrypted PPK Key = AC4D…….5C25
Key Scheme= X
Key Scheme LMK= U
Key Type = 001
ZMK = E68586760……..D7BE
ZMK Scheme = U


ZPK under LMK: U5F2DC42E10C92B16BA54802314CE95F5

Here we can compare KCV (AFDA4F) to check if key is imported successfully.


Signature and Certificate based key injection for ATM


Remote key loading infrastructures generally implement Diebold’s and Triton’s Certificate Based Protocols (CBP), and NCR, Wincor and Hyosung Signature based Protocols.

The Diebold and Triton approaches use X.509 certificates and PKCS message formats to transport key data. NCR, Wincor and Hyosung methods rely on digital signatures to ensure data integrity. Both processes require the loading of the ATM EPP with a public key or certificate at the factory. Both these methods are supported in and XFS compliant manner and this document describes the process of doing so as well as the pitfalls and benefits of using both methods.

The General Process


A prerequisite for using Remote Keys is for a customer to generate a set of keys or certificates that will be “signed” by a Certificate Authority or Trust Authority. Once signed, the public key or certificate signatures are returned and imported into the Host system. The EPPs obtain their signed public keys or certificates during the manufacturing process before being installed in ATMs.

Mutual Authentication

With public and private key pairs now present in the Host and in the ATM’s EPP, mutual authentication can be initiated with message exchanges from the Host to the EPP.  The ATM sends the EPP serial number to Host encrypted by its public key or certificate. The Host verifies the message and sends a message back to the EPP encrypted by its public key or certificate.

Key Delivery

With mutual authentication successfully completed, the Host receives a request to deliver a new terminal master key to the EPP. The Host receives the key request and generates a random terminal master key and encrypts it with the public key of the EPP and “signs” the new TMK message. This message is sent to the EPP. The EPP verifies the signature, decrypts the new terminal master key, and stores the key.

If the dialogue has been successfully completed, the EPP sends a notification back to the Host that it has loaded the new terminal master key including a Key Check Value (KCV) of the new key. If the terminal key load is unsuccessful, an appropriate error message will be returned to the Host. Upon receiving a “successful” terminal master key load message from the EPP with the correct KCV, the Host will establish the new TMK in the key database.



Remote Key Loading Using Signatures

RSA Data Authentication and Digital Signatures

Digital signatures rely on a public key infrastructure (PKI). The PKI model involves an entity, such as a Host, having a pair of encryption keys – one private, one public. These keys work in consort to encrypt, decrypt and authenticate data.

One-way authentication occurs is through the application of a digital signature. For example:

  1. The Host creates some data that it would like to digitally sign;
  2. Host runs the data through a hashing algorithm to produce a hash or digest of the data. The digest is unique to every block of data – a digital fingerprint of the data, much smaller and therefore more economical to encrypt than the data itself.
  3. Digest is encrypted with the Host’s private key. This is the digital signature – a data block digest encrypted with the private key.

The Host then sends the following to the ATM:

  1. Data block.
  2. Digital signature.
  3. Host’s public key.

To validate the signature, the ATM performs the following:

ATM runs data through the standard hashing algorithm – the same one used by the Host – to produce a digest of the data received. Consider this digest2;

ATM uses the Host’s public key to decrypt the digital signature. The digital signature was produced using the Host’s private key to encrypt the data digest; therefore, when decrypted with the Host’s public key it produces the same digest. Consider this digest1. Incidentally, no other public key in the world would work to decrypt digest1 – only the public key corresponding to the signing private key.

ATM compares digest1 with digest2. If digest1 matches digest2 exactly, the ATM has confirmed that the data was not tampered with in transit. Changing a single bit in the data sent from the Host to the ATM would cause digest2 to be different than digest1. Every data block has a unique digest; therefore, an altered data block is detected by the ATM.

Public key used to decrypt the digital signature corresponds to the private key used to create it. No other public key could possibly work to decrypt the digital signature, so the ATM was not handed someone else’s public key.

This gives an overview of how Digital Signatures can be used in Data Authentication. In particular, Signatures can be used to validate and securely install Encryption Keys.

The following section describes Key Exchange and the use of Digital signatures.


RSA Secure Key Exchange using Digital Signatures

In summary, both end points, the ATM and the Host, inform each other of their Public Keys. This information is then used to securely send the PIN device Master Key to the ATM.

A trusted third party, the Signature Issuer, is used to generate the signatures for the Public keys of each end point, ensuring their validity.

The detail of this is as follows:


The Host wishes to install a new master key (KM) on the ATM securely.


  • The Host has obtained the Public Key (PKSI) from the Signature Issuer.
  • The Host has provided the Signature Issuer with its Public Key (PKHOST), and receives the corresponding signature Sign(SKSI)[ PKHOST]. The Signature Issuer uses its own Private Key (SKSI) to create this signature.
  • In the case where Enhanced Remote Key Loading is used, the Host has provided the Signature Issuer with its Public Key (PKROOT), and receives the corresponding signature Sign(SKSI)[PKROOT]. The Host has generated another key pair PKHOST and SKHOST and signs the PKHOST with the SKROOT.
  • (Optional) The Host obtains a list of the valid PIN device’s Unique Identifiers. The Signature Issuer installs a Signature Sign(SKSI)[ UIATM] for the Unique Id (UIATM) on the ATM PIN. The Signature Issuer uses SKSI to do this.
  • The Signature Issuer installs its Public Key (PKSI) on the ATM PIN. It also derives and installs the Signature Sign(SKSI )[PKATM] of the ATM PIN’s Public Key (PKATM) on the ATM PIN. The Signature Issuer uses SKSI to do this.
  • The ATM PIN device additionally contains its own Public (PKATM) and Private Key (SKATM).

Steps for the Process


Step 1: The ATM PIN sends its Public Key to the Host in a secure structure: The ATM PIN sends its ATM Public Key with its associated Signature. When the Host receives this information it will use the Signature Issuer’s Public Key to validate the signature and obtain the ATM Public Key.

Step 2 (Optional):  The Host verifies that the key it has just received is from a valid sender. It does this by obtaining the PIN device unique identifier. The ATM PIN sends its Unique Identifier with its associated Signature. When the Host receives this information it will use the Signature Issuer’s Public Key to validate the signature and retrieve the PIN Unique Identifier. It can then check this against the list it received from the Signature Issuer.

Step 3 (Enhanced Remote Key Loading only) : The Host sends its root public key to the ATM PIN: The Host sends its Root Public Key (PKROOT) and associated Signature. The ATM PIN verifies the signature using PKSI and stores the key.

Step 4:  The Host sends its public key to the ATM PIN: The Host sends its Public Key (PKHOST) and associated Signature. The ATM PIN verifies the signature using PKSI (or PKROOT in the Enhanced Remote Key Loading Scheme) and stores the key

Step 5:  The ATM PIN receives its Master Key from the Host: The Host encrypts the Master Key (KM) with PKATM. A signature for this is then created. The ATM PIN will then validate the signature using PKHOST and then obtain the master key by decrypting using SKATM.

 Step 6 – Alternative including random number:  The Host requests the ATM PIN to begin the DES key transfer process and generate a random number. The Host encrypts the Master Key (KM) with PKATM. A signature for the random number and encrypted key is then created using SKHOST. The ATM PIN will then validate the signature using PKHOST, verify the random number and then obtain the master key by decrypting using SKATM.


Remote Key Loading Using Certificates

Certificate Exchange and Authentication

Both end points, the ATM and the Host, inform each other of their Public Keys. This information is then used to securely send the PIN device Master Key to the ATM. A trusted third party, Certificate Authority (or a HOST if it becomes the new CA), is used to generate the certificates for the Public Keys of each end point, ensuring their validity. In this message contains the Host certificate, which has been signed by the trusted CA. The Pinpad Cryptography Unit (CTU) uses the Public Key of the CA (loaded at the time of production) to verify the validity of the certificate. If the certificate is valid, the CTU stores the HOST’s Public Verification Key. The CTU then sends a message that contains a certificate, which is signed by the CA and is sent to the HOST. The HOST uses the Public Key from the CA to verify the certificate. If valid then the HOST stores the CTU’s verification or encryption key (primary or secondary this depends on the state of the CTU).



Remote Key Exchange

After the above has been completed, the HOST is ready to load the key into the CTU.

The following is done to complete this and the application must complete the Remote Key Exchange in this order:

  1. Return RATM from the CTU to be used in authenticating the message.
  2. Next, the ATM sends down the KTK to the CTU. The following items below show how this is accomplished.
  3. a) HOST has obtained a Key Transport Key and wants to transfer it to the CTU. HOST constructs a key block containing an identifier of the HOST, IHOST, and the key, KKTK, and enciphers the block, using the CTU’s Public Encryption Key.
  4. b) After completing the above, the HOST generates random data and builds the outer message containing the random number of the Host, RHOST, and the random number of the ATM, RATM. The identifier of the CTU, IENC, and the enciphered key block. The HOST signs the whole block using its private signature key and sends the message down to the CTU. The CTU then verifies the HOST’s signature on the message by using the HOST’s Public Verification Key. Then the CTU checks the identifier and the random number of the CTU passed in the message to make sure that the CTU is talking to the right HOST. The CTU then deciphers the enciphered block using its private verification key. After the message has been deciphered, the CTU checks the Identifier of the HOST. Finally, if everything checks out to this point the CTU will load the Key Transport Key
  5. c) After the Key Transport Key has been accepted, the CTU constructs a message that contains the random number of the Host, the random number of the CTU and the HOST identifier all signed by the private signature key of the CTU. This message is sent to the Host.
  6. d) The HOST verifies the message sent from the CTU by using the ATM’s public verification key. The HOST then checks the identifier of the Host and then compares the identifier in the message with the one stored in the HOST. Then checks the random number sent in the message and to the one stored in the HOST. The HOST finally checks the CTU’s random number with the one received.


Replace Certificate

After the key is been loaded into the CTU, the following could be completed: The new CA requests a Certificate from the previous Certificate Authority. The HOST must over-sign the message to take over the role of the CA to ensure that the CTU accepts the new Certificate Authority. The HOST sends the message to the CTU. The CTU uses the HOST’s Public Verification Key to verify the HOST’s signature. The CTU uses the previous CA’s Public Verification Key to verify the signature on the new Certificate sent down in the message. If valid, the EPP stores the new CA’s certificate and uses the new CA’s Public Verification Key as its new CA verification key.

The Refund vulnerability of AS2805 and EFTPOS

Transactions are normally validated, matched then processed. This is very common to ensure that requests sent to a payments switch are associated with its responses before delivering responses to a terminal. Now for all transaction types this process in true, except for refunds. Well, at least it’s not matched for most financial institutions in Australia.

Below is a few descriptions of transactions that might be processed through a typical switch in Australia:


Authorization / Cash Out

The Authorization transaction is typically used by a merchant to obtain the authorization of a transaction amount as a pre-approval for the purchase of goods or services later during the fulfillment process. Authorization transactions are typically submitted for authorization and then funds are held by the issuer until that transaction is captured or the authorization is reversed or expires. An example can be found with online retailers who initiate an Authorization transaction to guaranteed funding by the card issuer prior to the shipment/delivery (i.e. fulfillment) of the goods. An “Authorization” is also referred to as an Auth-Only transaction.

Sale / Purchase

A “Sale” transaction is used by merchants for the immediate purchase of goods or services. This transaction completes both the authorization and capture in a single transaction request. The Sale transaction is an Authorization and Capture transaction that if approved is automatically included for settlement.


Forced Sale

A “Forced Sale” is a transaction initiated by a merchant with the intent of forcing the posting of the transaction against the customer account without receiving prior authorization by the card issuer, or receiving a voice authorization code from the merchant acquiring call center. An example would be when a merchant’s terminal is offline, requiring the purchase of goods being completed without receiving online authorization by the card issuer. Or they received a Voice Approval. In these cases the merchant would enter the transaction details and forward this Forced Sale transaction to the card issuer with the expectation of receiving funding for the goods or services rendered. A forced sale does not require a matching authorization. Forced Sales are also known as Off-Line Sales.


A Refund allows a merchant to refund a previously settled transaction and submit the refund for processing. Refunds are only allowed for financial transactions (Sale and Captured) and are typically limited to the original authorization amount, or a lesser amount, in some cases, multiple partial refunds up to the original transaction amount. Some systems incorporate a feature called Matched Refunds. Matched Refunds must match back to an original transaction to help control fraud. “ Refunds” are also sometimes referred to as a “Credit” transaction.


Void transactions can reverse transactions that have been previously authorized or approved by the card issuer and are pending settlement. Merchants will only be allowed to void transactions that are in an open batch (pending settlement). Sale or Refund transactions are the most commonly voided transaction types.


The Capture transaction will allow merchants to capture a previously authorized transaction that is pending settlement, and submit it for clearing and settlement. An example is when online retailers who initiate an Authorization transaction to reserve funds by the card issuer prior to the shipment/delivery (i.e. fulfillment) of the goods, and then once fulfillment has been completed the transaction will be captured and submitted for settlement. A “Capture” is also referred to as a Pre-Authorization Completion transaction.


Now According to the AS2805 Specifications,   The refund is not matched to the transaction during the refund authorization, and will approve by default, you need to match the Refund to an Authorization or Sale when doing settlement.

This appears not implemented in Australia for some reason, and some financial institutions will actually admit it.

I have tried this on a EFTPOS machine, you should try this as well. Simply do a refund on a EFTPOS terminal without doing a transaction. All you would need is a 4 digit password to access the refund function (in some cases  refunds are not password protected) , these default passwords are published by the terminal manufacturers.

In every case that I’ve tried this, the refund is processed and the funds appeared in my account. This is surely a massive risk for fraud!!!!

Strange enough, the banks are not worried about this as the funds are tied to the merchant account, and it’s not a risk for the bank but for the Merchant. These are some clause in the contracts that absolve them from the risk.

So if you have a EFTPOS terminal, ask for the refund function to be disabled or you could be out of pocket!



DUKPT Explained with examples

Derived Unique Key Per Transaction (DUKPT) process that’s described in Annex A of ANS X9.24-2004.

It’s generally considered to be complex, but I’ve simplified it slightly with the help of online resources.

Key Management

Here’s a basic outline of the technique:

  1. You’re given a Base Derivation Key (BDK), which you assign to a swiper (note that the same BDK can be assigned to multiple swipers).
  2. You’ll use the BDK along with the device’s own unique Key Serial Number (KSN) to generate an Initial PIN Encryption Key (IPEK) for the device.
  3. You’ll assign this IPEK to a swiper, which uses it to irreversibly generate a list of future keys, which it’ll use to encrypt its messages.
  4. The swiper’s KSN is used along with one of its future keys to encrypt a message, and after each swipe it’ll increment the value of its KSN.
  5. Whenever a swiper takes a card it formats the card’s information into a series of tracks, each track having a particular set of information (e.g. card number, holder’s name, expiration date).
  6. The swiper usually encrypts these tracks using one of its generated future keys (called the “Session Key”) along with its current KSN. It’ll then increment the value of its KSN and discard the future key it used.
  7. At this point you’ll probably have an encrypted track along with the KSN the swiper used to encrypt it.
  8. It’s your responsibility to determine what BDK was used to initialize this device, and from there you’ll use the BDK and KSN to rederive the IPEK, which is used to rederive the Session Key, which is finally used to decrypt the message.

There’s a lot of technical information to be said about key management, but this isn’t the place for that. In some cases your provider/manufacturer (e.g. MagTek) will supply you with swipers that need to be initialized with an IPEK, and your supplier will usually have a manual that walks you through that process. If you’re doing encryption/decryption through a third party who also supplies swipers, they may have already loaded the devices with that information; what’s more is they may not even given you the BDK that belongs to your device in order to reduce the risk of security threats.

Note: Key management is beyond the scope of this explanation. Whatever you do with your keys, just make sure it’s secure.

One methodology I’ve seen that’ll allow you to associate a particular KSN to a BDK is to take the current KSN you’ve been given, mask it to retrieve the Initial Key Serial Number (IKSN), and look up the BDK in a table that maps IKSNs to BDKs:


ksn = FFFF9876543210E00008
iksn = ksn & FFFFFFFFFFFFFFE00000 // FFFF9876543210E00000

You’d then have a table that looks like:

0xFFFF9876543210E00000 0123456789ABCDEFFEDCBA9876543210

From which you could easily grab the BDK 0123456789ABCDEFFEDCBA9876543210.


Note: Assume that all numeric values are hexadecimal numbers, or the representation of a sequence of bytes as a hexadecimal number.

The following are the BDK, KSN, and encrypted track message (cryptogram) we’ve been given:

bdk = 0123456789ABCDEFFEDCBA9876543210
ksn = FFFF9876543210E00008
cryptogram = C25C1D1197D31CAA87285D59A892047426D9182EC11353C051ADD6D0F072A6CB3436560B3071FC1FD11D9F7E74886742D9BEE0CFD1EA1064C213BB55278B2F12

Here’s an example of the unencrypted track 1 data (cryptogram above), and below that is its value in hex; this is what we’ll get after successfully decrypting the cryptogram:

%B5452300551227189^HOGAN/PAUL      ^08043210000000725000000?

Note: As you’re probably already aware, this algorithm is best described using big numbers, which can’t be represented as literals in some programming languages (like Java or C#). However, many languages have classes that allow you to represent big numbers in other ways (e.g., java.math.BigInteger, System.Numerics.BigInteger). It’s your job to adapt this algorithm so that it can be represented in your language of choice. Two small problems I encountered were ensuring the correct endianness and signedness were being used (this algorithm requires the byte order to be big endian and that unsigned integers are used). I made a utility class called BigInt to do this for me.

First, let’s define a few standard functions:

  • DES and Triple DES refer to their respective cryptographic algorithms. Most programming languages have access to some implementation of these ciphers either through OpenSSL or Bouncy Castle. These ciphers are initialized with a zeroed out IV of 8 bytes, they’re zero-padded, and use Cipher-Block Chaining (CBC). Let’s define the signatures for these standard functions that’ll be used throughout this algorithm:
    • DesEncrypt(key, message) -> returns cryptogram
    • DesDecrypt(key, cryptogram) -> returns message
    • TripleDesEncrypt(key, message) -> returns cryptogram
    • TripleDesDecrypt(key, cryptogram) -> returns message

First we must create the IPEK given then KSN and BDK:

CreateIpek(ksn, bdk) {
    return TripleDesEncrypt(bdk, (ksn & KsnMask) >> 16) << 64 
         | TripleDesEncrypt(bdk ^ KeyMask, (ksn & KsnMask) >> 16)

Now we can get the IPEK:

ipek = CreateIpek(ksn, bdk)
     = CreateIpek(FFFF9876543210E00008, 0123456789ABCDEFFEDCBA9876543210)
     = 6AC292FAA1315B4D858AB3A3D7D5933A

After that we need a way to get the Session Key (this one is more complicated):

CreateSessionKey(ipek, ksn) {
    return DeriveKey(ipek, ksn) ^ FF00000000000000FF

The DeriveKey method finds the IKSN and generates session keys until it gets to the one that corresponds to the current KSN. We define this method as:

DeriveKey(ipek, ksn) {
    ksnReg = ksn & FFFFFFFFFFE00000
    curKey = ipek
    for (shiftReg = 0x100000; shiftReg > 0; shiftReg >>= 1)
        if ((shiftReg & ksn & 1FFFFF) > 0)
            curKey = GenerateKey(curKey, ksnReg |= shiftReg)
    return curKey

Where the GenerateKey method looks like:

GenerateKey(key, ksn) {
    return EncryptRegister(key ^ KeyMask, ksn) << 64 
         | EncryptRegister(key, ksn)

And EncryptRegister looks like:

EncryptRegister(key, reg) {
    return (key & FFFFFFFFFFFFFFFF) ^ DesEncrypt((key & FFFFFFFFFFFFFFFF0000000000000000) >> 64, 
                                                  key & FFFFFFFFFFFFFFFF ^ reg)

Then you can generate the Session Key given the IPEK and KSN:

key = CreateSessionKey(ipek, ksn)
    = CreateSessionKey(6AC292FAA1315B4D858AB3A3D7D5933A, FFFF9876543210E00008)
    = 27F66D5244FF621EAA6F6120EDEB427F

Which can be used to decrypt the cryptogram:

message = TripleDesDecrypt(key, cryptogram)
        = TripleDesDecrypt(27F66D5244FF621EAA6F6120EDEB427F, C25C1D1197D31CAA87285D59A892047426D9182EC11353C051ADD6D0F072A6CB3436560B3071FC1FD11D9F7E74886742D9BEE0CFD1EA1064C213BB55278B2F12)
        = 2542353435323330303535313232373138395E484F47414E2F5041554C2020202020205E30383034333231303030303030303732353030303030303F00000000
        = %B5452300551227189^HOGAN/PAUL      ^08043210000000725000000?

That’s it, you’re done!

EFTPOS Initialisation using RSA Cryptography

Before you start with RSA, you should generate a public and private key pair using your HSM. These can be group keys or specific to the terminal you need to connect. Your terminal manufacturer will also provide its public key and modulus. Using these keys you will be able to calculate the TMK1 and TMK2 and also your session keys. The process is in fact very simple.

Here is an example of how to create these keys using a Thales HSM

Generating an 1536 bit RSA Key




Public Key
Private key length
Private Key

Generate a MAC on 1536 RSA key





This is a generic version of RSA encryption using POS pinheads, there are variations in the field. Please keep that in mind when reading this.

Now when a POS terminal logs on for the first time it shall always logon using a 9820 message with a network management information code of 191, containing the TCU public key signed by the manufacturer’s secret key, and the un-enciphered PPID.

The Financial Switch shall respond with a 9830 message with the same network management information code, communicating the public key of the sponsor host (PKsp), and a random number.

The PIN Pad shall then generate the KI and send a 9820 message with a network management information code of 192 to the Financial Switch, containing the KI, PPID, date & time stamp, the random number and user data enciphered under the Financial Switch’s public key (PKsp) and signed by the TCU’s secret key (SKtcu). You will need to extract this information using your HSM H8 command, example below:

Input Data:





The Financial Switch shall check the PPID and random number. If the check fails, it will respond with a 9830 with a response code of “63”.

Where the Financial Switch is satisfied with the contents of the second 9820 message, it shall respond with the KCA and the KMACH enciphered under KI and its AIIC in the clear. When the PIN Pad has deciphered KCA and KMACH, it shall erase KI.

At this time the PIN Pad shall calculate the KIA. When the KIA has been calculated, the PIN Pad shall erase KCA.

The POS terminal shall then generate a 9820 message with a network management information code of 193 to the Financial Switch containing the PPID and the Financial Switch shall respond with a 9830 response containing the two initial KEKs and the PPASN.

You can generate this using the C0/C1 HSM command.

The POS terminal shall validate the MAC on the two KEKs and the PPASN and, if the MAC is valid, shall install KEK1, KEK2 and the PPASN and shall calculate the single length DES key KMACI. These keys are the terminal initial keys, that will updated in the season key exchange.

Once this has been carried out, the PIN Pad shall erase the KIA.

When these tasks have been completed, the POS terminal shall carry out its normal logon and session key installation with the Financial Switch. As the processing (initial logon then normal logon and session key installation) completes, the POS terminal will move into the “Ready” state.

easy as pie!

ATM Pin encryption using 3DES


Most modern ATM’s use a Triple Des algorithm to encrypt the pin and send it to a host server for processing. Once the host system receives the pin, it does a translation of the pin from one encryption key to another, and sends it to a bank. In this post I will attempt to explain the process and how it is done in the real world.

Overview of the Triple Data Encryption Standard

What we all call Triple DES is EDE (encrypt, decrypt, encrypt). The way that it works is that you take three 56-bit keys, and encrypt with K1, decrypt with K2 and encrypt with K3. There are two-key and three-key versions. Think of the two-key version as merely one where K1=K3. Note that if K1=K2=K3, then Triple DES is really Single DES.

Triple DES was created back when DES was getting a bit weaker than people were comfortable with. As a result, they wanted an easy way to get more strength. In a system dependent on DES, making a composite function out of multiple DESes is likely to be easier than bolting in a new cipher and sidesteps the political issue of arguing that the new cipher is better than DES.

As it turns out, when you compose a cipher into a new one, you can’t use a double enciphering. There is a class of attacks called meet-in-the-middle attacks, in which you encrypt from one end, decrypt from the other, and start looking for collisions (things that give you the same answer). With sufficient memory, Double DES (or any other cipher) would only be twice as strong as the base cipher — or one bit more in strength.

There’s more to it. If the cipher forms a group, then encrypting twice with two keys is equivalent to encrypting once with some key. Now, it’s not trivial to know what that other key is, but it means that a brute-force attack would find that third key as it tried all possible single-keys. So if the cipher’s a group, then multiple-ciphering is merely a waste of time.

Applying this encryption in Python is trivial as there are plenty of tested libraries that can provide the functionality like pyDes and Crypto :

import os
from Crypto.Cipher import DES3

def encrypt_file(in_filename, out_filename, chunk_size, key, iv):
    des3 =, DES3.MODE_CFB, iv)

    with open(in_filename, 'r') as in_file:
        with open(out_filename, 'w') as out_file:
            while True:
                chunk =
                if len(chunk) == 0:
                elif len(chunk) % 16 != 0:
                    chunk += ' ' * (16 - len(chunk) % 16)

def decrypt_file(in_filename, out_filename, chunk_size, key, iv):
    des3 =, DES3.MODE_CFB, iv)

    with open(in_filename, 'r') as in_file:
        with open(out_filename, 'w') as out_file:
            while True:
                chunk =
                if len(chunk) == 0:


ATM Internals and how they calculate the keys

When you have an ATM, you typically need to provide it with a set of encryption keys from your host, or HSM. These keys are clear text keys and it’s not encrypted in any way. Your host will link them to your terminal number, and when the ATM encrypts the pin; the host will know what keys are used so it can decrypt / translate them to the bank. The clear keys are never stored by the host, only the LMK encrypted keys.

Lets assume your host provides the following keys to you as the ‘ATM Encryption Key’ :

Clear component A: 67C4 A719 1ADA FD08 6432 CE0D D638 4AB
Key check value: 20D40B
Clear component B: 8A89 6D4C 4625 5E2A 1A75 2002 07A7 D35E
Key check value: 4EC801
Combined Check Value: 2B547D

Now typically you would enter the clear components into the ATM, as Encryption keys, and the ATM will combine them (Basically XOR Them) and derive the check value. If the check value match, then all is good.

What happens at your host end is the following:

Your host will also combine the keys and encrypt them under the LMK (Local Master Key). It will then use this key to encrypt all other keys that are sent to the ATM.

Now the ATM have a Terminal Master Key that it can use to decrypt all keys that are sent to it from the host.

ATM Configuration Request (Key Exchange)

Now when an ATM starts up, the first thing it does it send a configuration request to the host. This request is to get the Third key used in Triple DES.  The Host will generate a random Terminal Pin Key and encrypt it under the Terminal Master Key (TMK). Since the ATM has the Terminal Master Key, it can decrypt the encrypted TPK, and use all 3 Keys now for the Triple DES operations. (it actually uses 2)

The Host would generally execute the A0 Thales command to get this key. He would store the key in the key database to do the decryption / translation later.


Pin Encryption / Decryption

When a ATM gets ready to transmit a transaction it does the 3DES operation on the Pin only. the cypher text is now transmitted to the host. The host never knows the pin code, and only does a translation of the pin from the terminal keys to the bank keys.

The Host will have the following:

(ZPK) Zone Pin Key – from the Bank during Host to Bank Key exchange

(TPK) Terminal Pin Key – from Terminal using Terminal Configuration Request

(PAN) Account Number –  from Transaction transmitted.

With these values, the Host can translate the pin using a HSM, below is an example of the D4 Command.

 Res = KeyGenerator.TranslatePIN_TDES(TerminalPINKey=self.Crypto["TPK_LMK"], PINEncryptionKey=self.HostKeys["ZPK_LMK"], PINBlock=self.iso.getBit(52), AccountNumber=track2["PAN"][-13:-1])

def get_commandTPKPinBlock(self, TerminalPINKey, PINEncryptionKey, PINBlock, AccountNumber):

 command_code = 'D4'
 KTP = TerminalPINKey
 KPE = PINEncryptionKey
 PinBlock = PINBlock
 PAN = AccountNumber

 message = command_code
 message += KTP
 message += KPE
 message += PinBlock
 message += PAN
 return message
#transmit to HSM

The transaction can now be transmitted to the acquiring bank with the translated pin for processing.

Sometimes the ATM requires a Message Authentication Code, this will be covered in another post.

easy as pie



Implementing AS2805 Part 6 Host to Host Encryption using a Thales 9000 and Python


The AS2805.6 Standard specifies communication security between two nodes during a financial transaction. These nodes needs to have a specific set of encryption algorithms, and needs to follow a specific process.

The specification is not very clear on what exactly needs to happen, so I intend to clarify the exact steps, with the HSM functions. Now in order to do this I will assume you have a Thales 9000 HSM, as well as you need to know how to properly operate it. All commands defined are in the 1270A547-015 Australian Standards LIC003 v2.3a.pdf Manual provided by Thales when purchasing the device.

Source Code

a Copy of this Manual can be found  here  [Thales 9000 Australian Standards LIC003 v2.3a]

a Copy of my AS2805  parser is located here

a Copy of my Thales commands class is located here

a Full version of a AS2805 Interchange Node is located here

KEK Process (Level 1)

For this process:

  1. you need to go to your HSM and generate 2 Clear components, you then need to form a KEKs key from these components. This can be done using the UI of the HSM manger, or with the FK console command.
  2. Store the KEKs formed from the clear components in your switch database.
  3. Your connecting node / host will then provide you with a set of clear components, you need to generate a key again, but in this case a KEKr
  4. You need to provide you host with your key components you generated in Step 1,so they can generate their corresponding KEKs.

Now you have a KEKr and a KEKs in your database as well as your host read,  for Level2

Session and MAC key Initialisation (Level 2)

This Level has 2 separate steps, the first step (Logon) validating the KEKr and KEKs so that both nodes know that the correct keys are being used. The second step (Key Exchange) is to create temporary keys that are changed every 60 minutes or 256 transactions.

Logon Process


During the logon process your HSM will need to generate 2 things:

  1. a Random Number (RN)
  2. an Inverted Random Number (~RN)

These numbers will be returned encrypted under the KEKr and KEKs, and you will need to validate them, this is also called end of proof point validation.

The Logon process is a 2 step process outlined in the image below.

Step 1

When you connect to your host you will receive a logon request, bit number 48 will be populated with a KRs from the host that you will need to validate with your KEKr.

Generating a KEKr Validation Response you would need your KRs received in this request, and you KEKr that you generated from your host components.

E2 Command Definition: To receive a random key (KRs) encrypted under a variant of a double length Key Encrypting Key (KEKr), compute from KRs another value, denoted KRr and encrypt it under another variant of the KEKr

Your HSM command will look as follows: >HEADE2{KEKr}{KRs} and you output will generate a KEKr. Your response to the host will need to include this value in bit number 48.

Step 2

You now need to send the host a logon request with bit 48 set with your KRs

E0 Command Definition:To generate a random key (KRs) and encrypt it with a variant of a double length Key Encrypting Key (KEKs). In addition, KRs is inverted (to form KRr) and the result encrypted with another variant of the KEKs.

Your HSM command will look as follows: >HEADE0{KEKs} and the output will generate a KRs.  Your host will validate this request, and return with a response.

Once both steps are complete, both you and the host has been validated that you are using the same keys.

An Example of this process is outlined below in Python:


 def __signon__Part1__(self):"====Sign-On Process Started ====")
 cur = self.con_switch.cursor(MySQLdb.cursors.DictCursor)

 try:"Waiting for 0800 Request")
 length_indicator = self.s.recv(2)
 if length_indicator == '':
 self.log.critical('Received a blank length indicator from switch... might be a disconnect')
 size = struct.unpack('!H', length_indicator)[0]
 payload = self.s.recv(size)
 payload = ByteUtils.ByteToHex(payload)
 d =" Getting Sign-On Request 0800 = [%s]" % payload)
 if payload == '':
 self.log.critical('Received a blank response from switch... might be a disconnect')
 iso_ans = AS2805(debug=False)

 self.__storeISOMessage(iso_ans, {"date_time_received": d.strftime("%Y-%m-%d %H:%M:%S")})
 if iso_ans.getMTI() == '0800':
 if iso_ans.getBit(70) == '001':"Logon Started with KEKr = %s, KEKs = %s" % ( self.KEKr, self.KEKs))
 KRs = iso_ans.getBit(48)"KRs %s Received from Host" % (KRs))
 #print "Generating a E0 Command with KEKr=%s, and KRs=%s" % (self.KEKr, KRs)
 self.ValidationResponse = KeyGenerator.Generate_KEKr_Validation_Response(KEKr=self.KEKr, KRs=KRs)
 #print self.ValidationResponse

 if self.ValidationResponse["ErrorCode"] == '00':"KRs Validation Response %s generated" % (self.ValidationResponse["KRr"]))
 d =
 iso_resp = AS2805(debug=False)
 iso_resp.setBit(7, d.strftime("%m%d%H%M%S"))
 iso_resp.setBit(11, iso_ans.getBit(11))
 iso_resp.setBit(33, self.Switch_IIN)
 iso_resp.setBit(39, '303')
 iso_resp.setBit(48, self.ValidationResponse["KRr"])
 iso_resp.setBit(70, '0001')
 iso_resp.setBit(100, self.Switch_IIN)

 iso_send = iso_resp.getNetworkISO()
 iso_send_hex = ByteUtils.HexToByte(iso_send[2:])"Sending Sign-On Response 0810 [%s]" % ReadableAscii(iso_send))
 self.__storeISOMessage(iso_resp, {"date_time_sent": d.strftime("%Y-%m-%d %H:%M:%S")})
 self.log.error("0810 KRr Response Code = %s, Login Failed" % (self.ValidationResponse["ErrorCode"],))
 #TODO: Send Decline to the Partner

 self.log.error("Could not login with 0810")

 except InvalidAS2805, ii:
 except socket.error as e:
 self.log.debug("nothing from host [%s]" % (e))

 def __signon_Part2__(self):

 self.ValidationRequest = KeyGenerator.Generate_KEKs_Validation_Request(KEKs=self.KEKs)
 d =
 iso_resp = AS2805(debug=False)
 iso_resp.setBit(7, d.strftime("%m%d%H%M%S"))
 iso_resp.setBit(11, self.__getNextStanNo())
 iso_resp.setBit(33, self.HostIIN)
 iso_resp.setBit(48, self.ValidationRequest["KRs"])
 iso_resp.setBit(70, '001')
 iso_resp.setBit(100, self.HostIIN)
 iso_send = iso_resp.getNetworkISO()
 iso_send_hex = ByteUtils.HexToByte(iso_send[2:])"Sending Sign-On Request 0800 [%s]" % ReadableAscii(iso_send))
 self.__storeISOMessage(iso_resp, {"date_time_sent": d.strftime("%Y-%m-%d %H:%M:%S")})"Waiting for 0810 Response")
 a = self.s.recv(8192)
 payload = ByteUtils.ByteToHex(a[2:])
 d =" Getting Sign-On Response 0810 = [%s]" % payload)
 iso_ans = AS2805(debug=False)
 self.__storeISOMessage(iso_ans, {"date_time_received": d.strftime("%Y-%m-%d %H:%M:%S")})
 if iso_ans.getBit(39) == '3030':"====Sign-On Sequence Completed Successfully====")
 self.log.error("Could not login with 0800")
 except InvalidAS2805, ii:
 except socket.error as e:"nothing from host [%s]" % (e))


Key Exchange (Level 2)

In the Key Exchange process, you will generate session keys for your node as well as MAC keys. Now when generating these keys, you need to remember that they need to be the same type as you partner node. (simply ask your processor for a trace if you want to confirm)

So right after a successful logon, you would need to wait for a key exchange request, (0820 with field 30 as 303) this key exchange request will have  a ZAK and a ZPK in field 48, these are encrypted under the KEKr generated on your host from their components. You would need to translate these keys using your KEKr under your LMK and generate check values for verification.

The command will look like follows: >HEADOK{KEKr}21H{ZPK}1H{ZAK}0H11111111111111111111111111111111

These keys are known as your: RECEIVE KEYS

Where the KEKr is the KEKr generated from your components, ZPK and ZAK is the ZPK and ZAK received. This will output the following:

def Translate_a_Set_of_Zone_Keys(KEKr, ZPK, ZAK, ZEK):
 response = KeyClass.execute_Translate_a_Set_of_Zone_Keys(KEKr, ZPK, ZAK, ZEK)
 #print response
 TranslatedZoneKeys = {}
 TranslatedZoneKeys["Header"] = response[2:6]
 TranslatedZoneKeys["ResponseCode"] = response[6:8]
 TranslatedZoneKeys["ErrorCode"] = response[8:10]
 if TranslatedZoneKeys["ErrorCode"] == '00':
 TranslatedZoneKeys["KCV Processing Flag"] = response[10:11]
 TranslatedZoneKeys["ZPK(LMK)"] = response[11:44]
 TranslatedZoneKeys["ZPK Check Value"] = response[44:50]
 TranslatedZoneKeys["ZAK(LMK)"] = response[50:83]
 TranslatedZoneKeys["ZAK Check Value"] = response[83:89]
 TranslatedZoneKeys["ZEK(LMK)"] = response[89:122]
 TranslatedZoneKeys["ZEK Check Value"] = response[122:128]
 return TranslatedZoneKeys

In other words, you need to generate the same keys, but under your LMK and store them in your key database

Now whenever you get a request from your host with a mac you can validate the mac using the ZAK(LMK), and when you get encrypted values from your host you can translate the values using the ZPK(LMK)

So, when you respond to the key exchange process you put the check values in field 40. Your host will validate the check values, and then wait for you to send a request using your KEKs.

Here is an implementation using Python:

def __key_exchange_listen(self):"===== Key Exchange process Started =======")
 length_indicator = self.s.recv(2)
 if length_indicator == '':
 self.log.critical('Received a blank length indicator from switch... might be a disconnect')
 size = struct.unpack('!H', length_indicator)[0]
 payload = self.s.recv(size)
 payload = ByteUtils.ByteToHex(payload)
 d =" Receiving Key Exchange Request = [%s]" % payload)
 if payload == '':
 self.log.critical('Received a blank response from switch... might be a disconnect')
 iso_ans = AS2805(debug=False)
 iso_ans.setIsoContent("%s" % (payload))

 self.__storeISOMessage(iso_ans, {"date_time_received": d.strftime("%Y-%m-%d %H:%M:%S")})
 if iso_ans.getMTI() == '0820' and iso_ans.getBit(70) == '0101':
 Value = iso_ans.getBit(48)
 self.ZAK = Value[:32]
 self.ZPK = Value[32:]

 self.node_number = iso_ans.getBit(53)"Recieve Keys under ZMK : ZAK= %s, ZPK = %s" % (self.ZAK, self.ZPK ))

 self.ZoneKeySet2 = KeyGenerator.Translate_a_Set_of_Zone_Keys(self.KEKr,ZPK=self.ZPK, ZAK=self.ZAK, ZEK='11111111111111111111111111111111')
 cur = self.con_switch.cursor(MySQLdb.cursors.DictCursor)
 sql = """UPDATE sessions_as2805 set
 ZPK_LMK = '%s',
 ZPK_ZMK = '%s',
 ZPK_Check ='%s',
 ZAK_LMK = '%s' ,
 ZAK_ZMK = '%s',
 ZAK_Check = '%s',
 ZEK_LMK = '%s',
 ZEK_Check = '%s',
 keyset_number = '%s'
 WHERE host_id = '%s' and keyset_description = 'Recieve' """ %\
 self.ZoneKeySet2["ZPK Check Value"],
 self.ZoneKeySet2["ZAK Check Value"],
 self.ZoneKeySet2["ZEK Check Value"],
 self.host_id)"Recieve Keys under LMK : ZAK= %s, ZAK Check Value: %s ZPK = %s, ZPK Check Value: %s" % (self.ZoneKeySet2["ZAK(LMK)"], self.ZoneKeySet2["ZAK Check Value"], self.ZoneKeySet2["ZPK(LMK)"], self.ZoneKeySet2["ZPK Check Value"]))
 self.log.debug("Records=%s" % (cur.rowcount,))
 iso_req = AS2805(debug=False)
 iso_req.setBit(7, iso_ans.getBit(7))
 iso_req.setBit(11, iso_ans.getBit(11))
 iso_req.setBit(33, iso_ans.getBit(33))
 iso_req.setBit(39, '303')
 iso_req.setBit(48, self.ZoneKeySet2["ZAK Check Value"] + self.ZoneKeySet2["ZPK Check Value"])
 iso_req.setBit(53, iso_ans.getBit(53))
 iso_req.setBit(70, iso_ans.getBit(70))
 iso_req.setBit(100, iso_ans.getBit(100))
 self.__storeISOMessage(iso_req, {"date_time_sent": d.strftime("%Y-%m-%d %H:%M:%S")})

 iso_send = iso_req.getNetworkISO()
 iso_send_hex = ByteUtils.HexToByte(iso_send[2:])

 self.log.debug(iso_req.dumpFields())"Sending Key Exchange Response = [%s]" % ReadableAscii(iso_send))
 self.node_number = iso_ans.getBit(53)



These Keys are known as your SEND KEYS

So when you send a key exchange request you would need to generate a set of zone keys, this command on your HSM would look like this;


Where the KEKs is the KEKs that you generated from your components, and your output will be the following:

def Generate_a_Set_of_Zone_Keys(KEKs):
 response = KeyClass.execute_get_a_Set_of_Zone_Keys(KEKs)
 #print response
 ZoneKeys = {}
 ZoneKeys["Header"] = response[2:6]
 ZoneKeys["ResponseCode"] = response[6:8]
 ZoneKeys["ErrorCode"] = response[8:10]
 if ZoneKeys["ErrorCode"] == '00':
 ZoneKeys["ZPK(LMK)"] = response[10:43]
 ZoneKeys["ZPK(ZMK)"] = response[43:76]
 ZoneKeys["ZPK Check Value"] = response[76:82]
 ZoneKeys["ZAK(LMK)"] = response[82:115]
 ZoneKeys["ZAK(ZMK)"] = response[115:148]
 ZoneKeys["ZAK Check Value"] = response[148:154]
 ZoneKeys["ZEK(LMK)"] = response[154:187]
 ZoneKeys["ZEK(ZMK)"] = response[187:220]
 ZoneKeys["ZEK Check Value"] = response[220:226]
 return ZoneKeys

Now when sending your  0820 request, you need to set field 40 as ZAK(ZMK) + ZPK(ZMK). Your host will do a Validation request (same as you did in step 1) and send you the check values. you need to compare this to the check values generated by your OI command, and if they match then you have successfully exchanged keys.

Below is an implementation using Python:


 def __keyExchange__(self):


 cur = self.con_switch.cursor(MySQLdb.cursors.DictCursor)
 d =
 self.ZoneKeySet1 = {}
 self.ZoneKeySet2 = {}
 self.ZoneKeySet1 = KeyGenerator.Generate_a_Set_of_Zone_Keys(self.KEKs)

 iso_req = AS2805(debug=False)
 iso_req.setBit(7, d.strftime("%m%d%H%M%S"))
 iso_req.setBit(11, self.__getNextStan())
 iso_req.setBit(33, self.HostIIN)
 iso_req.setBit(48, self.ZoneKeySet1["ZAK(ZMK)"][1:] + self.ZoneKeySet1["ZPK(ZMK)"][1:])
 iso_req.setBit(53, self.node_number)
 iso_req.setBit(70, '101')
 iso_req.setBit(100, self.SwitchLink_IIN)
 self.__storeISOMessage(iso_req, {"date_time_sent": d.strftime("%Y-%m-%d %H:%M:%S")})"Send Keys under LMK : ZAK= %s, ZAK Check Value: %s ZPK = %s, ZPK Check Value: %s" % (self.ZoneKeySet1["ZAK(LMK)"], self.ZoneKeySet1["ZAK Check Value"], self.ZoneKeySet1["ZPK(LMK)"], self.ZoneKeySet1["ZPK Check Value"]))


 # send the Send Keys
 iso_send = iso_req.getNetworkISO()
 iso_send_hex = ByteUtils.HexToByte(iso_send[2:])

 self.log.debug(iso_req.dumpFields())"Sending Key Exchange Request = [%s]" % ReadableAscii(iso_send))

 length_indicator = self.s.recv(2)
 if length_indicator == '':
 self.log.critical('Received a blank length indicator from switch... might be a disconnect')
 size = struct.unpack('!H', length_indicator)[0]
 payload = self.s.recv(size)
 payload = ByteUtils.ByteToHex(payload)
 d =" Receiving Key Exchange Response = [%s]" % payload)
 if payload == '':
 self.log.critical('Received a blank response from switch... might be a disconnect')
 iso_ans = AS2805(debug=False)
 self.__storeISOMessage(iso_ans, {"date_time_received": d.strftime("%Y-%m-%d %H:%M:%S")})

 if iso_ans.getMTI() == '0830':
 if iso_ans.getBit(39) == '3030':

 Value = iso_ans.getBit(48)
 self.KMACs_KVC = Value[:6]
 self.KPEs_KVC = Value[6:]"KMACs_KVC = %s, KPEs_KVC = %s" % (self.KMACs_KVC, self.KPEs_KVC))
 if self.KMACs_KVC == self.ZoneKeySet1["ZAK Check Value"] and self.KPEs_KVC == self.ZoneKeySet1["ZPK Check Value"]:"0820 Key Exchange successful: Check Values Match, ZAK Check Value= %s , ZPK Check Value = %s" % (self.ZoneKeySet1["ZAK Check Value"], self.ZoneKeySet1["ZPK Check Value"]))
 sql = """UPDATE sessions_as2805
 ZPK_LMK = '%s',
 ZPK_ZMK = '%s',
 ZPK_Check= '%s' ,
 ZAK_LMK= '%s',
 ZAK_ZMK = '%s',
 ZAK_Check ='%s',
 ZEK_LMK = '%s' ,
 ZEK_ZMK = '%s',
 ZEK_Check = '%s',
 keyset_number = '%s'
 WHERE host_id = '%s' and keyset_description = 'Send' """%\
 ( self.ZoneKeySet1["ZPK(LMK)"],
 self.ZoneKeySet1["ZPK Check Value"],
 self.ZoneKeySet1["ZAK Check Value"],
 self.ZoneKeySet1["ZEK Check Value"],

 self.log.debug("Records=%s" % (cur.rowcount,))

 self.__setState('session_key_ok')"==== Key Exchange Sequence Completed Successfully====")
 self.last_key_exchange =

 self.log.error("Generate_a_Set_of_Zone_Keys: KVC Check Failed!!")
 self.log.error("0820 Response Code = %s, Key Exchange Failed" % (iso_ans.getBit(39)))
 except InvalidAS2805, ii:
 self.s = None


Now that keys have successfully been exchanged, you can start submitting transactions.

When sending transactions encrypt data (pin / field) Send Keys, and when receiving data translate / decrypt using your receive keys, Generate MAC using Send MAC and Verify using Receive MAC.

  • TAK – Your key to generate and verify MACs
  • TEK – Your key to encrypt data and decrypt / translate

This concludes the implementation of Node to Node interfaces using AS2805 Standards.

Easy as Pie!