Master Key Derivation

Introduction
Each bank owns its Issuer Master Keys. These keys aimed at generating unique keys by derivation for each
transaction.
The key derivation is performed with a Triple DES algorithm.
A bank owns four types Issuer Master Key (IMK) :

Application Cryptogram (AC)

Secure Messaging Integrity (SMI)
Secure Messaging Confidentiality (SMC)
ICC Dynamic Number (IDN)

A Master Key (MK) is dedicated to each card. The Master Key is associated to the card during the personalization
phase.
The Master Keys are derived from the Issuer Master Keys.
Master Key Derivation

Master Key derivation process

The Master Key Derivation method takes as input the PAN and PAN Sequence Number, plus a 16-byte Issuer Master
Key IMK, and produces the 16-byte ICC Master Key.

Input Data : PAN (Private Account Number), PAN_SN (PAN Sequence Number), IMK (Issuer Master Key)
Output Data : MK (Master Key)

1.
2.
3.
4.

Y
ZL
ZR
Z

=
=
=
=

PAN || PAN_SN ;
( || concatenation operation )
DES3 (IMK) (Y) ;
DES3 (IMK) ((Y) xor ('FF' || 'FF' || 'FF' || 'FF' || 'FF' || 'FF' || 'FF' || 'FF')) ;
ZL || ZR ;

The 16-byte ICC Master Key MK is then equal to Z, with the exception of the least significant bit of each byte of Z
which is set to a value that ensures that each of the 16 bytes of MK has an odd number of non-zero bits (this is to
conform with the odd parity requirements for DES keys).
Explanation for each step :
1.
2.
3.
4.

First, we concatenate the PAN with the PAN Sequence Number. ( Exemple : PAN = "12 34 56 78 90 12 3F
FF" ; PAN_SN = "01"; Y = "12 34 56 78 90 12 3F FF 01" )
We apply the Triple DES algorithm on Y. The result is stored in Z L. ZL is 8-byte length.
We apply the Triple DES algorithm on Y after performing an XOR operation between Y and eight bytes set
to 'FF'. The result is stored in ZR. ZR is 8-byte length.
The concatenation result between ZL and ZR is stored in Z. Z is 16-byte length.

Conclusion
Master Key Derivation is the middle step in the Key Derivation Process.

Glossary

ARC

ARQC

ARPC

Authentification
Card master
keys
Cryptogram

DES
IAD
IMK

MAC

PAN
PAN SN
Session Key

Authorisation Response Code: The issuer's answer to an

authorisation request. The issuer's responses are typically:
approve the transaction, decline the transaction, call your bank...
Authorisation ReQuest Cryptogram: The cryptogram generated by the
card for transactions requiring online authorization and sent to the
issuer in the authorization request. The issuer validates the ARQC
during the online card authentication process to ensure that the card is
authentic, was not created using skimmed data and that data stored in
the card has not been altered since card issuance.
Authorisation ResPonse Cryptogram: A cryptogram generated by the
issuer and sent to the card in the authorization response. This
cryptogram is the result of the Authorization Request Cryptogram
(ARQC) and the issuers authorization response code (ARC)
encrypted with the card secret key. The cards validates it during
online issuer authentication to ensure that the response came from a
valid issuer.
A cryptographic process that validates the integrity of data and its
origin.
These keys are used to generate session keys unique for each
transaction. The card uses these session keys to compute ARQCs
and validate issuer's ARPCs.
A numeric value that is the result of data elements put into an
algorithm and then encrypted. It is commonly used to validate data
integrity.
Data Encryption Standard is a symmetic cryptographic algorithm.
Issuer Authentication Data: Data sent to the card from the issuer host
for online issuer authentication.
Issuer Master Keys are used to generate the unique card master keys
for each card during personalisation. The issuer hosts uses them to
recover the card master keys to validate ARQCs and generate
ARPCs.
Message Authentication Code: A numeric value generated using a
cryptographic algorithm, which establishes that the contents of a
message have not been changed and that the message was
generated by an authorized entity.
Primary Account Number is the valid cardholder account number.
PAN Sequence Number identifies and differentiates cards with the
same PAN.
A temporary cryptographic key computed and no longer valid after the
end of the transaction.