An e-Commerce fair exchange protocol for exchanging digital products and payments

A new optimistic fair exchange protocol between a customer (C) and a merchant (M) is presented, that makes minimum use of a trusted third party. The protocol is for exchanging a payment with a digital product in the B2C domain. A novel feature of the protocol is that once the parties have agreed to the exchange then they are forced to be honest. The protocol has the following features: (1) it comprises of only three messages sent between C and M in the exchange phase; (2) it guarantees strong fairness for both C and M: (3) it allows both parties to be sure of the item that they will receive; and (4) it automatically resolves disputes online.