Magnet credit cards, also known as magnetic stripe cards are one of the oldest methods of payment. This is widely used today, which confers flexibility on the holders. Such cards incorporate the use of magnetic stripe to enshrine core card data and enable purchase transactions. It is now time to get a closer look at the usage of magnets in credit cards and the general functioning principles of these cards.
Mechanism of Magnet Credit Cards
Magnetic stripe cards, such as credit cards, have a magnetic strip running through their back part. This magnetic stripe contains data which is crucial for processing transactions inclusive of the account number of the cardholder, expiry date of the card, and any other information. The magnetic strip is made up of a series of magnetic particles and an information region.
Utilising Magnetic Fields for Transaction Processing
When the Magnet credit cards is slid through the card reader machine or when making a point of sale purchase the magnetic strip on the back of the card comes into contact with the magnetic head. When the card moves through the reader, the magnetic particle on the stripe creates a unique magnetic field. These patterns are read, and then the encoded data embedded on the stripe is decoded. The reading device is then allowed to get details of the cardholder’s account.
Authentication and Authorization Process
After the Magnet credit cards data has been read by the terminal, the data is sent to the issuers or the respective financial institution for validation. The bank confirms the details of the cardholder. Then it approves it in accordance with laid down parameters. After getting approval from the issuer, the transaction is effected, and the card holder can go ahead with the purchase.
Security Features of Magnet Credit Cards
Despite being portable, common and efficient in their operations magnet credit cards also have security issues. The data in these cards that is embedded in the magnetic stripe does not change with time. The card is vulnerable and susceptible to skimming devices and frauds. To overcome this weakness many issuers are moving towards safer technologies like EMV chip cards which give far better security than conventional cards against counterfeiting and unauthorized use of a card.
Future Trends in Payment Technology
In the recent past, innovation in payment methods has brought about other methods of payment using NFC tech and mobile money. These innovations serve as a more secure and more comfortable replacement for the magnetic stripe cards.
Conclusion
To sum up, an insight into how Magnet credit cards use magnets gives some insight into the working of the payment system’s technology and its processes. Thus, the only history of the payment cards and systems can be considered a history of social interaction tools. They have been developing while meeting the needs of members of the society for the exchange of goods and services for valuable consideration. Through the use of the principal payment instrument the most sophisticated payment systems actualize the possibilities of new technologies. Also it determines the tendencies in the development of the payment processing
