All About The Stripe on Your Credit Card

The back of all credit cards contains a magnetic stripe. This is sometimes called the magstripe. This stripe is created by using iron based magnetic particles inside a film that resembles plastic. All of the particles are really just a miniscule bar magnet that is shorter than one 20 millionths of an inch.

How It Works

The magstripe on the back of the credit card is similar to a cassette tape. It can be “written” because the little magnet bar uses a north or south pole path for magnetization. I am sure you have seen a magstripe reader at many businesses you frequent; this reader can understand information on the three-track stripe. The information on a magstripe can be erased by exposure to a magnet or a store’s electronic article surveillance tag demagnetizer. Therefore, you need to be careful about what comes in contact with your card.

Each of the magstripe’s three tracks is approximately 1/10 of an inch wide. The first track holds 79 6-bit plus parity bit read-only characters and is 210 bits per inch. The second track is holds 40 4-bit plus parity bit characters and is 75 bpi. The third track holds 107 4-bit plus parity bit characters and is 210 bpi.

Usually your credit card will use only the first and second tracks. The third track’s usage is not consistent among banks. Information such as a country code, currency units, authorized dollar value and encrypted PIN is all included on this track.

When You Are at The Store

Three methods exist to determine if your card is able to pay for your purchases. A business that issues only a few transactions per month can use a touch tone phone to verify the authenticity of a caller’s voice. Electronic data capture (EDC) magstripe card swipe terminals are also becoming more popular as is swiping your own credit card at the check-out or using an online virtual terminal.

Credit cards will first be swiped using a device called a “reader.” A number is then called which connects to an organization via special software and a terminal referred to as a point-of-sale terminal. The organizations that assemble any requests for verification of credit from the seller are called “acquirers” and they reassure the seller that they will receive their payment.

Acquirer companies receive requests for confirmation of the credit card and then verify the transaction for legitimacy. They check the evidence on the magstripe for the merchant ID, a legitimate card number, the expiration date, the credit card limit and the card usage.
A dial up transaction is processed at 1200 to 2400 bits per second (bps), while an internet attachment uses faster speeds. Unique personal identification numbers are entered by users with the help of a special keypad. The pin is encrypted in a database, not on your credit card.

Security For Your Credit Card

All communication between your credit cards and any central computer is encrypted to prevent anyone from tapping into the phone lines and being able to copy the signal. Every day companies are devising new ways to foil any potential thieves. A new credit card called a Smart Card now exists and it uses additional security measures to protect your personal information and to avoid identity theft.