Private authorization codes: data minimization in card not present transactions

Abstract

Web-based credit card payments require complete disclosure of all payment card details for transaction authorization. The card’s CVV (Card Verification Value) is the secret code that authorizes card not presented transactions. Currently, all payment card details must be shared among various intermediaries involved in processing the transaction. To mitigate the risks associated with fraudulent transactions, industries have adopted security standards such as the PCI DSS. Credit card data confidentiality rests on all involved stakeholders adhering to best security practices, including data communication encryption, and do not misuse the payment information. However, this security posture does not prevent potential credit card data leaks. We propose an alternative method for conducting remote card payments that does not require disclosing the authorization code while ensuring high interoperability with existing payment networks. Our approach demonstrates how designated verifier Zero-Knowledge Proofs (ZKP) enable minimal disclosure of card details, particularly protecting the confidentiality of authorization codes.