Atalla Box

Lore & Background

Mohamed M. Atalla, co-inventor of the MOSFET with Dawon Kahng, founded Atalla Technovation in 1972. That same year he filed a patent for a remote PIN verification system using encryption to secure telephone links. He then invented the Atalla Box, a security system that encrypted PIN and ATM messages. Commercially released in 1973, it consisted of a card reader console, two customer PIN pads, an intelligent controller, and a built-in electronic interface package. The device allowed a customer to type a secret code that was transformed by a microprocessor into another code for the teller, replacing manual entry and signature verification.

A key innovation of the Atalla Box was the key block, required to securely interchange symmetric keys or PINs with other banking actors. This secure interchange used the Atalla Key Block (AKB) format, which lies at the root of all cryptographic block formats within PCI DSS and ANSI standards. Atalla's work led banks and credit card companies to develop an international standard, and his PIN verification process was similar to the later IBM 3624 system. Atalla was an early competitor to IBM in banking and influenced IBM employees working on the Data Encryption Standard (DES).

In 1976, Atalla announced the Interchange Identikey upgrade, adding online transaction processing and network security capabilities. The device could reset itself to any of 64,000 irreversible nonlinear algorithms. In 1979, Atalla introduced the first network security processor (NSP). The company merged with Tandem Computers in 1987, which was acquired by Compaq in 1997, then by HP in 2001. After HP split in 2015, Atalla products went to Hewlett Packard Enterprise, which spun them out to Micro Focus in 2017. In 2018, Utimaco acquired the Atalla HSM and ESKM business lines from Micro Focus.

Reader's Guide

The Atalla Box is significant as the first hardware security module, establishing the cryptographic infrastructure for the global payment card industry. Its invention of the key block and the Atalla Key Block format became foundational to PCI DSS and ANSI standards, enabling secure symmetric key and PIN interchange among banks. By encrypting PINs and ATM messages, the device replaced insecure manual verification methods like signature checks and test questions. The Atalla Box's influence is evident in its market dominance: it protected over 90% of ATM networks by 1998 and secured 85% of worldwide ATM transactions by 2006. As of 2013, Atalla HSMs protected 250 million card transactions daily. The device also spurred the development of international standards for PIN security, as banks and credit card companies worked to avoid Atalla monopolizing the market. Mohamed M. Atalla is recognized as the 'Father of the PIN' and a father of information security technology for his work on the PIN system and information security management.

Did You Know?

• The Atalla Box was commercially released in 1973, distinct from the Identikey card reader and customer identification system.
• The Atalla Key Block (AKB) format lies at the root of all cryptographic block formats used within PCI DSS and ANSI standards.
• As of 2014, Atalla HSMs secured the majority of the world's ATM transactions.
• Mohamed M. Atalla, co-inventor of the MOSFET with Dawon Kahng, founded the company in 1972 and is referred to as the 'Father of the PIN'.