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Credit Card Security Features





There are several security features common to credit cards. See here for further details of the security features of each specific credit card type (e.g. Visa, Mastercard, American Express, etc).

Magnetic stripe

The magnetic stripe is located on the back of the credit card and contains encoded identifying information about the card’s account.

The encoded data is read when the credit card in swiped through a point-of-sale (POS) terminal. The data is displayed on the POS terminal’s screen and should match the information on the card itself—this information should be compared to verify the authenticity of the card.

The magnetic stripe is made up of minute iron-based magnetic particles—each about 8-millionths of a centimetre long—that can be magnetised in either a north or south pole direction. This creates the code in the magnetic stripe.

The magnetic stripe has three tracks that are encoded with different types of information:

  • primary Account Number (PAN)—the number on the credit card;
  • country code;
  • full name;
  • expiration date;
  • longitudinal Redundancy Check (LRC)—a character that can enable a card reader to detect read failures;
  • discretionary data—for instance, language of choice (used by ATMs to personalise instructions), or a ‘personal identification number (PIN) offset’ generated from the PIN using an algorithm.

The American National Standard for Financial Services—Financial Transaction Cards—Magnetic Stripe Encoding (ANSI X4.16) defines the characteristics of the magnetic stripe of the credit card. This includes the stripes’ physical, chemical and magnetic characteristics, such as its minimum and maximum size, and the location of the three encoded tracks. The contents of track 3 are defined by the American National Standard—Magnetic Stripe Data Content for Track 3 (ANSI X9.1).



Microchip technology

Micro-chips are a standard feature of credit cards and provide protection for each transaction. Credit card details are stored as encrypted data on this chip. Each time the card is used, a unique, one-time code is generated and registered by both the card and the bank. A new code is generated for each transaction, so if your credit card is cloned, fraudulent use is more difficult.

The micro-chip can be read using payWave technology, which involves holding the credit card within 4 centimetres of the device. If the transaction is above a certain amount, you may be required to enter a four to six digit personal identification number (PIN).

Authorities have concluded that micro-chip technology, coupled with the move to the use of PINs instead of signatures for transaction verification, has helped to significantly reduce counterfeit fraud (Source: APCA -2015)

Micro-chip technology offer protection against fraudulent use in several ways:

  • using payWave means that it is difficult for your card to be read without your knowledge (as you must hold the card within 4cm of the device);
  • only small transactions (e.g. less than $100) can be made using payWave; larger transaction amounts also require the personal identification number (PIN) to be entered, thereby protecting you from thefts of larger amounts;
  • Using micro-chip technology, each transaction goes through a global fraud network that analyses and scores the transaction in real time for its fraud potential; your financial institution is then potentially able to quickly pick up suspicious transactions.

Personal identification number (PIN)

As described above, a personal identification number (PIN) coupled with the micro-chip is an important security feature for credit cards. To be most effective at preventing fraudulent use, the PIN should be carefully chosen so that it can not be easily guessed or figured out. For example, PINs should not be based on obvious dates (e.g. birthdates) or names (e.g. pets), and should not be written down or stored near where the card is kept (e.g. in your wallet).

Unique credit card number

Each credit card has a unique card number (the primary account number, PAN) that is embossed on the front of the credit card. Visa and MasterCard credit cards have numbers printed just above the embossed card number—these should match the first digits of the card number. (Note: on an American Express card, the printed numbers above the embossed card number is the CVV security code, see below). The account number will also be printed on the back of the credit card, and should match the card number on the front, as well as the number appearing on the sales receipt.

If the merchant is uncertain of the validity of the credit card, he/she can check the credit card number using a credit card BIN database. The best credit card BIN list can be found at l-company.info

CVV security code

The CVV (card verification value) is also referred to as the CVC (card verification code), CID (card identification number), or CSC (card security code) depending on the card type. The code is a three or four digit security number located in a specific place on the card, depending on the card type. For example:

  • for a Visa or MasterCard credit card, the three-digit CVV is printed in reverse italics on the back of the card to the right of the last four digits of the account number and within the signature panel;
  • for an American Express credit card, the four-digit CVV is printed above the embossed account number on the right or left of the card.

Signature panel

All credit cards have a signature panel on the back of the card under the magnetic strip. Depending on the card type, the signature field may contain the card number and CVV security code (in reverse italics) or have a background graphic pattern (e.g. a wavy pattern at a 45-degree angle). For features of specific cards, see [link to article on credit card types].

Hologram

Depending on the card type, there may be a hologram on the front or back of the card. This three-dimensional image will appear to move when the card is tilted back and forth. For example, a Visa card will have a hologram of a dove on the front that appears to move when the card is tilted.

Unique security character

Some credit card types have a unique security character on the front of the card. For example, a Visa card includes a stylised “flying V”

Account name and photo

The name of the cardholder is embossed on the lower left of the front of the card, and should match other identification of the cardholder. Some card types also have a photo, which can be compared with the person presenting the card.

Expiry date

Credit cards are designed to expire regularly (typically every three years); when they expire, a new card is issued with a new expiry date. The expiry date provides an additional security feature as it is one more piece of data that the merchant can use to verify the legitimacy of the transaction.

The expiry date is embossed in the format mm/yy on the front of the credit card above the cardholder name; a legitimate card will have a valid expiry date. Additional security features for some credit cards.