Network Working Group K. Fujimura

Network Working Group K. Fujimura
Request for Comments: 3506 NTT
Category: Informational D. Eastlake
Motorola
March 2003

Requirements and Design for Voucher Trading System (VTS)

Status of this Memo

This memo provides information for the Internet community. It does
not specify an Internet standard of any kind. Distribution of this
memo is unlimited.

Copyright Notice

Copyright (C) The Internet Society (2003). All Rights Reserved.

Abstract

Crediting loyalty points and collecting digital coupons or gift
certificates are common functions in purchasing and trading
transactions. These activities can be generalized using the concept
of a "voucher", which is a digital representation of the right to
claim goods or services. This document presents a Voucher Trading
System (VTS) that circulates vouchers securely and its terminology;
it lists design principles and requirements for VTS and the Generic
Voucher Language (GVL), with which diverse types of vouchers can be
described.

Conventions used in this document

The key words "MUST", "MUST NOT", "REQUIRED", "SHALL", "SHALL NOT",
"SHOULD", "SHOULD NOT", "RECOMMENDED", "MAY", and "OPTIONAL" in this
document are to be interpreted as described in [RFC2119].

Table of Contents

1. Background ....................................................2
2. Terminology and Model .........................................3
2.1 Voucher ...................................................3
2.2 Participants ..............................................3
2.3 Voucher Trading System (VTS) ..............................4
3. VTS Requirements ..............................................5
3.1 Capability to handle diversity ............................6
3.2 Ensuring security .........................................6
3.3 Ensuring practicality .....................................7

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RFC 3506 Voucher Trading System (VTS) March 2003

4. Scope of VTS Specifications ...................................7
4.1 Voucher Trading Protocol ..................................7
4.2 VTS-API ...................................................8
4.3 Generic Voucher Language ..................................8
5. GVL Requirements ..............................................8
5.1 Semantics .................................................8
5.2 Syntax ....................................................9
5.3 Security .................................................10
5.4 Efficiency ...............................................10
5.5 Coordination .............................................10
5.6 Example of GVL ...........................................10
6. Application Scenarios ........................................11
7. Q & A ........................................................13
8. Security Considerations ......................................13
9. Acknowledgments ..............................................13
10. References ...................................................13
11. Authors' Addresses ...........................................14
12. Full Copyright Statement......................................15

1. Background

It is often necessary to credit loyalty points, collect digital
coupons or gift certificates, etc, to complete purchases or other
trading transactions in the real world. The importance of these
activities is also being recognized in Internet Commerce. If a
different issuing or collecting system to handle such points or
coupons must be developed for each individual application, the
implementation cost will be excessive, inhibiting the use of such
mechanisms in electronic commerce. Consumers may also be forced to
install a number of software modules to handle these points or
coupons.

A voucher is a digital representation of the right to claim services
or goods. Using vouchers, a wide-range of electronic-values,
including points or coupons, can be handled in a uniform manner with
one trading software module.

This document presents the terminology and model for a Voucher
Trading System (VTS) that circulates vouchers securely; it also lists
design principles and requirements for a VTS and the Generic Voucher
Language (GVL), with which diverse types of vouchers can be
described.

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2. Terminology and Model

2.1 Voucher

A voucher is a digital representation of the right to claim goods or
services. To clarify the difference between vouchers and electronic
money/digital certificates, we introduce a formal definition of
vouchers in this document.

Let I be a voucher issuer, H be a voucher holder, P be the
issuer's promise to the voucher holder. A voucher is defined as
the 3-tuple of <I, P, H>.

Examples of P are as follows:

o Two loyalty points are added to the card per purchase. If you
collect 50 points, you'll get one item free. (Loyalty points)

o Take 10% off your total purchase by presenting this card.
(Membership card)

o Take 50% off your total purchase with this coupon. The purchase
transaction uses up the coupon. (Coupon)

o The bearer can access "http://..." for one month free. (Free
ticket for sales promotion)

o The bearer can exchange this ticket for the ordered clothes.
(Exchange ticket or Delivery note)

o Seat number A-24 has been reserved for "a-concert" on April 2.
(Event ticket)

Note that P does not need to be described in terms of a natural
language as long as the contents of the vouchers are specified. For
example, a set of attribute name and value pairs described in XML can
be employed to define the contents.

2.2 Participants

There are four types of participants in the voucher trading model:
issuer, holder, collector, and VTS provider. Their roles are as
follows:

Issuer: Creates and issues a voucher. Guarantees contents of
the voucher.

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Holder (or user): Owns the vouchers. Transfers and redeems
the voucher to other users or collector.

Collector (or examiner): Collects or examines the voucher and
implements its promise. In general, compensated by goods or
services rendered.

VTS Provider: Provides a VTS and guarantees that a particular
voucher is not assigned to multiple holders or used multiple times
unless permitted for that voucher type.

The IOTP model [IOTP] includes merchant, deliverer, consumer and
other participants. They take various roles in the settlement
because a merchant, for example, can be considered as an issuer, or
holder depending on whether the merchant creates the voucher
her/himself or purchases it from a wholesaler or manufacturer. A
merchant can also be a collector if the shop collects gift
certificate or coupons.

2.3 Voucher Trading System (VTS)

A voucher is generated by the issuer, traded among holders (users),
and finally is collected by the collector:

<I, P, H> <I, P, H'> <I, P, H'>
Issuer I --------> User H ---------> User H' ---------> Collector
Issue Transfer Redemption

Figure 1. Life cycle of vouchers

The VTS provider supplies a VTS that enables vouchers to be
circulated among the participants securely.

A formal definition of VTS is as follows:

A voucher trading system (VTS) is a system that logically manages
a set of valid vouchers VVS, which is a subset of {<I, P, H> | I
in IS, P in PS, H in HS} where IS is the set of issuers, PS is the
set of promises, and HS is the set of holders; VTS prevents them
from being modified or reproduced except by the following three
transactions: issue, transfer, and redemption. The initial state
of the VVS is an empty set.

Note that this does not imply that VVS is stored physically in a
centralized database. For example, one implementation may store
vouchers in distributed smart cards carried by each holder [T00],

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or may store them in multiple servers managed by each issuer or
trusted third parties. This is a trust policy and/or
implementation issue [MF99].

Issue
An issue transaction is the action that creates the tuple of <I,
P, H> and adds it to the VVS with the issuer's intention.

Transfer
A transfer transaction is the action that rewrites the tuple of
<I, P, H> (in VVS) as <I, P, H'> (H<>H') to reflect the original
holder H's intention.

Redemption
There are two redemption transactions: presentation and
consumption.

A presentation transaction is the action that shows the tuple of
<I, P, H> (in VVS) to reflect the holder H's intention. In this
case, the ownership of the voucher is retained when the voucher is
redeemed, e.g., redemption (presentation) of licenses or
passports.

A consumption transaction is the action that deletes the tuple of
<I, P, H> (in VVS) to reflect the holder H's intention and
properties of the voucher. The ownership of the voucher may be
voided or the number of times it is valid reduced when the voucher
is redeemed, e.g., redemption of event tickets or telephone cards.

Note that one or more of these transactions can be executed as part
of the same IOTP purchase transaction. See details in Section 6.

3. VTS Requirements

A VTS must meet the following requirements

(1) It MUST handle diverse types of vouchers issued by different
issuers.

(2) It MUST prevent illegal acts such as alteration, forgery, and
reproduction, and ensure privacy.

(3) It MUST be practical in terms of implementation/operation cost
and efficiency.

Each of these requirements is discussed below in detail.

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3.1 Capability of handling diversity

(a) Different issuers

Unlike a digital cash system that handles only the currency issued by
a specific issuer such as a central bank, the voucher trading system
MUST handle vouchers issued by multiple issuers.

(b) Various types of vouchers

Unlike a digital cash system that only handles a currency, the system
MUST handle various types of vouchers, such as gift certificates,
coupons, and loyalty points.

3.2 Ensuring security

(c) Preventing forgery

Only the issuer can cause a valid voucher to be issued. It MUST NOT
be possible for other parties to cause a valid voucher to be created.

(d) Preventing alteration

Voucher MUST NOT be altered during circulation except that the
transfer transaction, in which the voucher holder is rewritten, is
permitted. Only the current holder can initiate a transfer
transaction.

(e) Preventing duplicate-redemption

A voucher MUST NOT be redeemable once it has been consumed (the
result of some redemption transactions). Only the holder can
initiate a redemption transaction.

(f) Preventing reproduction

Voucher MUST NOT be reproduced while in circulation. That is, there
must be only one valid holder of any particular voucher at any
particular time.

(g) Non-repudiation

It SHOULD NOT be possible to the issuer to repudiate the issuance, or
the holder to repudiate the transfer or redemption of a voucher,
after it is issued, transferred or redeemed.

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(h) Ensuring privacy

Current and previous holders of a voucher SHOULD be concealed from
someone coming into possession of the voucher.

(i) Trust manageability

If a wide variety of vouchers are in circulation, it might be
difficult for users to judge whether a voucher can be trusted or not.
To assist such users, a trust management function that verifies the
authenticity of a voucher SHOULD be supported.

3.3 Ensuring practicality

(j) Scalability

A single centralized broker that sells all types of vouchers, or a
centralized authority that authenticates all issuers or other
participants, SHOULD NOT be assumed. A system that relies on a
single centralized organization is excessively frail; failure in that
organization causes complete system failure.

(k) Efficiency

It MUST be possible to implement VTS efficiently. Many applications
of vouchers, e.g., event ticket or transport passes, require high
performance, especially when the voucher is redeemed.

(l) Simplicity

It SHOULD be possible to implement VTS simply. Simplicity is
important to reduce the cost of implementation. It is also important
in understanding the system, which is necessary for trust in the
system.

4. Scope of VTS Specifications

To implement a VTS, Voucher Trading Protocol (VTP), VTS Application
Programming Interface (VTS-API), and Generic Voucher Language (GVL)
must be developed. The objectives, benefits, and limitations of
standardization for each specification are discussed below.

4.1 Voucher Trading Protocol

To achieve interoperability among multiple VTSs developed by
independent VTS Providers, standard protocols for issuing,
transferring, or redeeming vouchers will be needed. However, there
are several ways of implementing VTS. For discount coupons or event

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tickets, for example, the smart-card-based decentralized offline VTS
is often preferred, whereas for bonds or securities, the centralized
online VTS may be preferred. It is impractical to define any
standard protocol at this moment.

4.2 VTS-API

To provide freedom in terms of VTS selection for issuers and
application developers, a standard Voucher Trading System Application
Programming Interface (VTS-API) that can encapsulate VTS
implementations should be specified. It allows a caller application
to issue, transfer, and redeem voucher in a uniform manner
independent of the VTS implementation. Basic functions, i.e., issue,
transfer, and redeem, provided by VTS-API can be straightforwardly
derived from the VTS model described in this document. More design
details of the VTS-API will be discussed in a separate document or a
separate VTS-API specification.

4.3 Generic Voucher Language

To satisfy the diverse requirements placed on VTS (see Section 3), a
standard Generic Voucher Language (GVL) that realizes various voucher
properties should be specified. This approach ensures that VTS is
application independent. The language should be able to define
diverse Promises P of the voucher <I, P, H> to cover tickets,
coupons, loyalty points, and gift certificates uniformly. Specifying
I and H is a VTS implementation issue and can be achieved by using a
public key, hash of a public key, URI or other names with scope rule.

In the following section, we discuss GVL Requirements in detail.

5. GVL Requirements

5.1 Semantics

Semantics supported by the language and their requirements levels are
described below in detail.

(a) Validity control

The invalidation (punching) method that is executed when the voucher
is redeemed depends on the type of the voucher. For example, a
loyalty point will be invalidated if the point is redeemed but a
membership card can be used repeatedly regardless of the number of
times presented. The language MUST be able to define how validity is
modified. Additionally, the language MUST be able to define the
validity period, start date and end date.

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(b) Transferability control

Some types of vouchers require transferability. The language MUST be
able to specify if a voucher can be transferred.

(c) Circulation control

Depending on the type of the voucher, various circulation
requirements or restrictions must be satisfied [F99], for example,
only qualified shops can issue particular vouchers or only a certain
service provider can punch (invalidate) particular vouchers. The
language SHOULD be able to specify such circulation requirements.

(d) Anonymity control

Different types of voucher will require different levels of
anonymity. The language SHOULD be able to achieve the required level
of anonymity.

(e) Understandability

The terms and description of a voucher SHOULD be objectively
understood by the participants, because this will contribute to
reducing the number of disputes on the interpretation of the vouchers
promised.

(f) State manageability

Some types of vouchers have properties the values of which may change
dynamically while in circulation, e.g., payment status, reservation
status, or approval status. The language MAY support the definition
of such properties.

(g) Composability

Some types of vouchers consist of several sub-vouchers, which may be
issued separately from the original vouchers typically because the
vouchers are issued by different organizations or issued at different
times. The language MAY support compound vouchers composed of
multiple sub-vouchers.

5.2 Syntax

To achieve consistency with other related standards shown below, the
syntax of the language MUST be based on XML [XML].

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The language syntax MUST enable any application-specific property,
e.g., seat number, flight number, etc. to be defined. A schema
definition language that can be translated into application-specific
DTDs may be needed.

5.3 Security

The language MUST provide the parameters necessary to establish
security. Security requirements, however, mainly follow VTS
requirements described in Section 3 rather than GVL requirements.

5.4 Efficiency

The vouchers may be stored in a smart card or PDA with a restricted
amount of memory. Large definitions may incur long transfer and
processing times, which may not be acceptable. The language SHOULD
enable the efficient definition of vouchers

5.5 Coordination

The language specification SHOULD be consistent with the following
specifications:

(1) Internet Open Trading Protocol v1.0 [IOTP]
(2) XML-Signature [XMLDSIG]
(3) Extensible Markup Language (XML) Recommendation [XML]
(4) ECML Version 2 [ECML]

5.6 Example of GVL

An example of a voucher definition in GVL is described below. This
example defines a five dollar discount coupon for specific
merchandise, a book with ISBN number 0071355014. This coupon is
circulated using a VTS called "Voucher Exchanger". To claim this
offer, one coupon must be spent. The coupon is valid from April 1st
in 2001 to March 31st in 2002.

<?xml version="1.0"?>
<Voucher xmlns="urn:ietf:params:xml:schema:vts-lang"
xmlns:vts="http://www.example.com/vts">
<Title>IOTP Book Coupon</Title>
<Description>$5 off IOTP Book</Description>
<Provider name="Voucher Exchanger">
<vts:Version>VE2.31</vts:Version>
</Provider>
<Value type="discount" spend="1">
<Fixed amount="5" currency="USD"/>
</Value>

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<Merchandise>
<bk:Book xmlns:bk="http://www.example.com/bk"
bk:isbn="0071355014"/>
</Merchandise>
<ValidPeriod start="2001-04-01" end="2002-03-31"/>
</Voucher>

6. Application Scenarios

This section describes, as a typical electronic commerce example
involving advertisement, payment, and delivery transactions, the use
of vouchers and VTS, and shows that vouchers can be used as an
effective way to coordinate autonomous services that have not yet
established trust among each other.

Figure 2 shows a typical electronic commerce example of a consumer
searching for goods or services and making a purchase:

----------
------------------------------------------->| Ad |
| (1) Acquire a coupon | Agency |
| ----------
|
| (2) Send payment information ----------
| --------------------------------------->| Payment |
| | Acquire a gift certificate | Handler |
| | ----------
v v (3) Transfer the coupon &
---------- gift certificate ----------
| Consumer |<------------------------------------>| Merchant |
---------- Acquire an exchange ticket & ----------
^ loyalty points
|
| (4) Transfer the exchange ticket ----------
------------------------------------------->| Deliverer|
Supply goods or services | Handler |
----------

Figure 2. Application example of vouchers

(1) Use a search engine to find the desired goods or services and
acquire a coupon from an ad agency that represents the right to
purchase the goods or services at a discounted price.

(2) Acquire a gift certificate from a payment handler in exchange for
cash or payment information.

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(3) Transfer the coupon and gift certificate to the merchant, and in
exchange acquire an exchange ticket and loyalty points.

(4) Transfer the exchange ticket to the deliverer handler and receive
the goods or services.

In this example, the coupon, gift certificate, and exchange ticket
each represent the media that yields the above four transactions.

Note that it is not necessary to trust the participants involved in
the transactions, but to trust the vouchers themselves. In other
words, there is no need to exchange contracts among the participants
beforehand if the vouchers themselves are trusted.

Take the exchange ticket as an example; even if the delivery handler
does not trust the consumer, the merchant that issued the exchange
ticket is trusted, and if the VTS guarantees that there is no
duplication in the trading process of the exchange ticket, there is
no problem in swapping the exchange ticket for the goods or services.
In the same way, even if the merchant does not trust the delivery
handler, the issuance of the exchange ticket can be verified, and if
the VTS guarantees that there is no duplication in the trading
process of the exchange ticket, there is no problem in swapping the
exchange ticket for the goods or services (Fig. 3). In other words,
if there is trust in the issuer and the VTS, trust among the
participants involved in the transactions is not required.

Exchange Exchange
---------- ticket ---------- ticket ----------
| Consumer |-------->| Delivery |-------->| Merchant |
| |<--------| Handler |<--------| |
---------- Goods or ---------- Goods or ----------
services services

Figure 3. Coordination of untrusted participants
using exchange ticket

In general, it is more difficult to trust individuals than companies,
so this characteristic of VTS is especially important.

Moreover, the transactions involving vouchers have desirable features
with respect to privacy protection. For example, in the above
exchange ticket scenario, the consumer can designate the delivery
service for himself, so the merchant does not even need to know any
personal information such as the delivery address. Furthermore, by
designating a convenience store etc. as the receiving point, the
delivery service does not need to know the address of the consumer.

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7. Q & A

- Is it possible to implement a VTS using digital certificates?

If transferability is not required, a voucher can be easily
implemented as a digital certificate, i.e., Signed_I(I, P, H),
where the phrase "Signed_I" means that the entire block is signed
by the issuer's digital signature. If transferability is
required, then H is changed during the transfer, i.e., the
signature is broken. Additionally, online data base checking or
tamper-resistant devices are required to prevent duplicate-
redemption.

- What is the difference from digital-cash?

VTS must handle various types of vouchers, such as gift
certificates, coupons, or loyalty points unlike a digital cash
system which handles only currency. Additionally, vouchers are
issued by different issuers.

- Is it possible to support "digital property rights?

Digital property rights can be represented as a voucher and can be
traded using VTS. However, some protected rendering system would
be required to regenerate the digital contents securely in order
to support digital property rights. These requirements are out of
scope of VTS.

8. Security Considerations

Security issues are discussed in Section 3.2 and 5.3.

9. Acknowledgments

I would like to thank Masayuki Terada and Perry E. Metzger, for their
valuable comments.

10. References

[ECML] ECML Version 2, Work in Progress.

[F99] K. Fujimura, H. Kuno, M. Terada, K. Matsuyama, Y. Mizuno,
and J. Sekine, "Digital-Ticket-Controlled Digital Ticket
Circulation", 8th USENIX Security Symposium, August 1999.

[RFC2119] Bradner, S., "Key words for use in RFCs to Indicate
Requirement Levels", BCP 14, RFC 2119, March 1997.

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RFC 3506 Voucher Trading System (VTS) March 2003

[IOTP] Burdett, D., "The Internet Open Trading Protocol", RFC
2801, April 2000.

[MF99] K. Matsuyama and K. Fujimura, "Distributed Digital-Ticket
Management for Rights Trading System", 1st ACM Conferences
on Electronic Commerce, November 1999.

[T00] M. Terada, H. Kuno, M. Hanadate, and K. Fujimura, "Copy
Prevention Scheme for Rights Trading Infrastructure", 4th
Smart Card Research and Advanced Application Conference
(CARDIS 2000), September 2000.

[XML] "Extensible Mark Up Language (XML) 1.0 (Second Edition)", A
W3C Recommendation, <http://www.w3.org/TR/REC-xml>, October
2000.

[XMLDSIG] "XML-Signature Syntax and Processing", A W3C Proposed
Recommendation, <http://www.w3.org/TR/xmldsig-core>, August
2001.

11. Authors' Addresses

Ko Fujimura
NTT Corporation
1-1 Hikari-no-oka
Yokosuka-shi
Kanagawa, 239-0847 JAPAN

Phone: +81-(0)468-59-3814
Fax: +81-(0)468-59-8329
EMail: [email protected]

Donald E. Eastlake 3rd
Motorola
155 Beaver Street
Milford, MA 01757 USA

Phone: +1-508-851-8280
EMail: [email protected]

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12. Full Copyright Statement

Copyright (C) The Internet Society (2003). All Rights Reserved.

This document and translations of it may be copied and furnished to
others, and derivative works that comment on or otherwise explain it
or assist in its implementation may be prepared, copied, published
and distributed, in whole or in part, without restriction of any
kind, provided that the above copyright notice and this paragraph are
included on all such copies and derivative works. However, this
document itself may not be modified in any way, such as by removing
the copyright notice or references to the Internet Society or other
Internet organizations, except as needed for the purpose of
developing Internet standards in which case the procedures for
copyrights defined in the Internet Standards process must be
followed, or as required to translate it into languages other than
English.

The limited permissions granted above are perpetual and will not be
revoked by the Internet Society or its successors or assigns.

This document and the information contained herein is provided on an
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TASK FORCE DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
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HEREIN WILL NOT INFRINGE ANY RIGHTS OR ANY IMPLIED WARRANTIES OF
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Acknowledgement

Funding for the RFC Editor function is currently provided by the
Internet Society.

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