How to Authenticate a Credit Card?

How is a Credit Card Authenticated?

Credit card validation goes a long way when it comes to businesses whose cash flows depend on customers’ credit card transactions. In this regard, there’s two important things that play a role in validating a credit card, namely, the credit card number validation and verification of the associated account holder. 

When it comes to credit card number validation, a credit card is assigned a specific set of digits. In this respect, the verification ensures that the digits associated with the credit card in question aren’t just random numbers but are associated with that specific card in the issuer’s database. The second step ensures that the card is being used by the actual holder, to ensure it has not been stolen.

Two Steps to Authenticate a Credit Card

1. Credit Card Number Validation

Credit cards are issued with Bank Identification Numbers which are 8 digits specific to the credit card servicer. They are placed around at the start of the credit card number and are consistent for each type. For instance, Visa cards begin with the digit 4 while Mastercard numbers begin with 5. 

Validation of the credit card number shows that it’s not just a random number generated for a fake credit card. Credit card numbers are validated through Luhn Algorithm. It takes each number of the card and doubles it from right to left. If the doubling of any number produces a sum greater than 9, then 9 is subtracted from the sum to get a single digit. With that done, the sum of all numbers is taken and if this sum is divisible by 10 then the credit card is said to be valid. This algorithm is automatically run in virtually all the transaction mediums like ATMs. 

2. Card Holder Verification 

Number verification only shows that the credit card number is genuine and not made up. However, the process is incomplete without the holder’s verification. That is done to ensure the credit card number is not stolen. It requires a CVV number, a number consisting of 3-4 digits located on the back of the card. Other than that, the holder’s name and mailing address is often asked prior to any transaction to verify the user is authentic as well. 

3 Ways to Protect Your Credit Card and Identity from Theft

Credit card theft is a very real concern in the online world and a lot of people aren’t savvy enough to protect their credit cards from online theft. Here are a few of the steps you can take to ensure your credit card and your identity is safe. 

1. Never give or fill credit card information on unsafe websites

With online shopping commonplace, many people have set up online E-commerce stores without proper regard for customer’s privacy. You need to take proper care and avoid shopping on online shopping stores that do not have SSL (Secure Sockets Layer) certificates in place. These certificates authenticate a website’s security and encryption of the website traffic including any credentials that are used on the site. 

Encryption ensures that any potential hackers sniffing the traffic, cannot read it. You can identify such protected sites with the “https” in their URLs. Unsafe websites have “http” in their URL and you should not put any credentials on such websites as hackers can sniff but also easily decode the traffic packets on unencrypted websites.

2. Don’t allow storage of Credit Card Information on Third Party Platforms

If you’re buying something online with a credit card, some merchants could ask you to store your credit card information for future convenience but you need to avoid it. The merchants’ intention may or may not be sinister but if there’s any chance their website gets hacked in the future, your credit card information would end up in the wrong hands.

3. Use an Additional Trusted Layer

Whether you’re buying goods or services over the internet, it’s generally prudent to not use your credit card directly. Rather, use trusted financial transactions facilitators or digital wallets to pay merchants or servicers instead of going direct shopping with a credit card. Popular digital wallets like Apple Pay and Paypal are safer and it is more secure to store your credit card information with them and then use these wallets for online buying instead of using your credit card directly.