Quantum computing has an impact on world of payments

Recent breakthroughs in quantum computing have raised hopes that we might be able to create useful quantum computers. While that day is still away, it is very likely we will reach there. This has implications for many fields but it has very important implications for the world of payments. In this article we discuss what quantum computing would mean for payments. 

The invisible foundation of online payments, credit card payments and all banking communication is cryptography. While an average consumer never even knows the word, this field of mathematics has been a cornerstone of computer security. Cryptography involves converting information into an unreadable meaningless blob using a “key”. Only those parties which have the key can then understand the information. Symmetric key cryptography and Asymmetric key cryptography has powered secure communication for decades and we have come to take these technologies for granted. 

However, these algorithms are not 100% secure. Guessing correct keys would compromise the security of such algorithms. But this guesswork is computationally extremely expensive. RSA and Elliptic Curve Cryptography (ECC) algorithms are the most common algorithms used for encryption using asymmetric key cryptography. These methods have a public key and a private key that a party generates. As the name suggests public key is publicly made available whereas private key is kept secret. Any party wishing to communicate with this party can then encrypt the data using a public key. This data can only be decrypted using a private key. It is not impossible to guess the private key from the public key but computationally it is very very expensive. Modern supercomputers will take billions of years to break an ECC algorithm which for humans is as good as impossible. 

However, a quantum computer with a few million qubits could break this algorithm within hours. Such a computer is still a theoretical possibility and does not exist but might exist sometime in future. Additionally some of the encrypted data can be captured today and the future hackers might be able to decrypt it in future.

Symmetric key cryptography is another common form of cryptography and generally used in credit cards and tap and pay. These are resistant to quantum computers as well. Quantum computers will be better at breaking these algorithms than classical computers but not by very much making this cryptography still very quantum resistant. 

What does this mean for payments ? 

Luckily payment information generally has a time value. Credit cards and other information are pretty much useless after a certain time has passed. Even with quantum computers, real time transactions won’t be impacted for large parts. But stored data that uses asymmetric key cryptography might be at risk. 

Good news is that Post-Quantum Cryptography (PQC) is a new field of research and new algorithms that are quantum resistant are being designed and standardized. The U.S. National Institute of Standards and Technology (NIST) has created lattice based cryptographic algorithm standards. 

These standards, while not yet widely adopted, are in the process of being adopted and very likely would replace the old technologies like RSA and ECC. 

In short, quantum computing will impact payment standards in future. But the good news is we are adequately prepared.