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Lately, there have been a couple of projects which aim to replace all the credit cards in your wallet with a single smart device which will hold all of them, sync with your smartphone, etc. (Namely Coin and Protean)

What I specifically don't like, however, is that there are so many points of failure involved:

  1. Both require inputting card information on your smartphone, and both seem to sync card information with their servers. They promise that they "encrypt" all data. Problems:
    1. Do I really trust them with their deploying cryptography properly?
    2. Do I really trust them that they will store things securely?
  2. Both use Bluetooth for communication with your phone, which seems downright dangerous.
    • Coin additionally uses Bluetooth to develop a sort of proximity sensor which doesn't allow the card to process transactions unless the phone is nearby.
      1. How are they doing this? If they're just doing a Bluetooth MAC search, that's mindlessly simple to spoof.
    • Bluetooth has a number of security problems.

Are there any solutions out there (or even in the works) which act more like TPM/smartcard devices which work on proven standards and would hold up to audits?

Specifically, I don't like the idea of having so many points of failure (Bluetooth, on-phone "encryption" provided by them, online "encrypted" backups provided by them). I'm really interested in the idea of using a secure single-card device, provided that it actually is secure in an auditable, proven way.

  • What is your actual question? Product recommendations are off topic here. – Rory Alsop Jan 1 '16 at 21:20
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Do you trust the vendors you buy from? They are all bound by PCI-DSS and the penalties for storing it insecurely can be pretty harsh. Older versions of Bluetooth had security problems(2.3 and prior), but if they are using current versions, there aren't known security issues, so it is possible to have a trusted pairing.

Is it as strong as having a TPM based system, no, but it also isn't as expensive or complicated to use and it isn't really any less secure than many "stored credit card" options that many consumers still use. For many, CC transactions are only valid if they made them and disputing invalid transactions is trivially simple, with zero liability, so it simply isn't seen as a risk by many.

Also note that these devices ONLY work on magnetic stripe cards, which are inherently insecure to begin with. You can't use them with chip based credit cards, so the markets they apply to are already not particularly worried about the security of the card data.

Using a TPM, while nice for us security nuts, is overkill compared to the existing risks in the system for the cards that these devices are designed to work with. They already provide a comparable or better level of security than the existing system does. Your cards could be stolen or copied, this system provides a way to know when your card is scanned and to link them all to one device (your phone) which will likely be far quicker to notice if it is stolen. It uses an optional online backup, but many consumers already do that with vendors.

There is fairly minimal real new security risk introduced by these devices provided they are using a recent, secure version of bluetooth and particularly if they protect the credit card details with a key stored on the card itself (so that malware on the phone can't get access).

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