Credit Card Technology
Credit card innovations that have revolutionised the way we pay on plastic
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What do the numbers on a credit card mean?
Visa cards always start with a 4 and the second through to the sixth number represents the financial institution. Either the seventh through to the 12th number or the seventh through to the 15th are for the account number. The final 13th of 16th digit is the check number.
All Mastercard credit cards begin with a 5. The second and third, second and fourth or second and fifth are the institution number. Every other number up until 15 is the account number and the check digit is the 16th number.
The difference between magnetic stripe, chip and PIN-protected cards
The stripe on the back of your credit card is a magnetic stripe (the magstripe). Made up of iron-based magnetic particles, the acquirer checks the magstripe for the card’s merchant ID, valid card number, expiration date, credit card limit and card usage. Most EFTPOS terminals accept chip payments, so the magnetic stripe is usually just included for overseas purchases.
Chip and PIN
As well as storing your card information, the chip uses cryptography to protect your secure data when communicating with the card reader. These payments also require a four-digit PIN for authorisation, making them a more secure option than the magstripe.
Tap and go
All new credit cards are now equipped with NFC contactless payment technology (such as Visa’s payWave and Mastercard PayPass). Hold your card within 4cm of a PayPass or PayWave terminal, and you can approve payments of $100 or less without entering your PIN.
Using NFC technology, every transaction generates a unique code that prevents you from being incorrectly billed and encryption data protects your finances from fraudulent activity. All new credit cards come with credit card technology and 59% of Aussies use it to make purchases.
Mobile contactless payments
Mobile contactless payments use the NFC chip that is in your mobile to make payments at contactless payments. In Australia, you can use Samsung Pay, Google Pay and Apple Pay to make mobile payments in the same way you would usually tap and go.
Rather than storing the information on your phone, a Device Account Number is assigned to your phone, encrypted and stored in the Secure Element (a dedicated chip in your device). When you make a purchase, this Device Account Number as well as a transaction-specific dynamic security code will approve the payment.
You can now withdraw funds from your credit or debit account without your card. Referred to as cardless cash, you usually need to use the relevant mobile banking app, select the chosen account and enter how much you want to withdraw. The app will then generate a cash code that you can use at the ATM to withdraw cash.
Apps and online account management
Combine your payments
Currently only available in the US, products such as the Plastic card are an example of a smartcard that can be used to combine all of your accounts (from debits cards, credit cards, gift cards and more) on the one card. Equipped with a touch screen on the card, you enter a security screen and then swipe left or right to select the card you want to use. You just use the Plastic app to enter the details of the cards you’d like to use. So on the one card, you could redeem a gift voucher, make a big ticket purchase on your credit card and withdraw cash from an ATM with your debit card.
If you lose the card, you can use the app to lock it and wipe your card and then resync it if you find the card again.
Put a ring on it with the Visa-powered payment ring
During the 2016 Rio olympics, US athletes were gifted with a variety of Visa-powered wearables including the sweat and water-resistant Swatch Bellamy wearable watch and a Visa-based payment ring to make contactless payments. These wearables used NFC technology to make payments in the same way your PayWave-enabled card or mobile would.
The Visa-based payment rings are no longer limited to medal winners, though. For AUD$53, anyone can now pre-order an NFC ring that lets you tap and pay at any Visa paywave terminal in the US. As with an Apple Watch, you won’t need your phone to make the payment. Instead, the device uses anonymising tokens to make the payments itself. With Australia leading the charge in contactless card payments, these technologies are sure to make their way down under before we know it.
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