IEEE Consumer Electronics Magazine - March/April 2020 - 31

Figure 2. Supporting KYC and AML for MP using cryptocurrency when a bank is involved.

checker monitors transactions on the blockchain and within the bank system and can link
them with credential information of involved
parties to make sure that all KYC/AML requirements are satisfied.

Case 2: MP for Merchant With a Cryptocurrency
Account
When both the payer and the merchant have
cryptocurrency accounts, the two-step payment
protocol can be applied and only three players are
involved: the payer with a smart device to make
payment, the merchant with a cryptocurrency
account, and the blockchain-based cryptocurrency system. Figure 3 demonstrates the sketch of
MP using cryptocurrency without a centralized
bank using the two-step payment protocol.

Figure 3. Reducing latency in cryptocurrency MP
using smart devices without a centralized bank. The
strategy is to use a two-step payment to shift the
latency.

March/April 2020

MP protocol for case 2 The MP protocol for
case 2 leverages the two-step payment mechanism described in the section "Fine-Grained Payment Schemes," which works as follows.
1) Prepayment. The payer generates a set of prepayment records according to his/her preferences and submits them to the blockchain.
2) Payment request initialization. The merchant
sends the payment request to the payer,
which includes identity of the merchant, the
value of the payment, and the merchant's
digital signature that protects the authenticity/integrity of the request. The merchant
can also share his/her preferred list of notaries with the payer.
3) Payment submission. The payer selects an
adequate prepayment record according to
information received from the merchant, and
collaborate with the merchant to prepare the
message to finish the selected prepayment.
The message is then send to notaries listed
in the prepayment record to confirm.
4) Payment confirmation. Notaries sign the message and submit it to the blockchain-based
cryptocurrency system. The signed message
is also sent to the merchant. The merchant
does not need to wait for this transaction to
be confirmed on the blockchain if he/she
trusts those notaries as a group.
The payer knows prepayment records he/she
generated so he/she does not need to query
the blockchain to obtain these information. For
the merchant, he/she only needs to verify the
confirmed payment record which is signed by a

31



IEEE Consumer Electronics Magazine - March/April 2020

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