Have you ever wondered what credit card numbers mean and how they work? Credit card numbers are tied to specific checking accounts just like account numbers. These numbers are in place to help prevent payment errors and fraud; they also help to ensure easy payments. Here’s how the credit card numbers work;
How Credit Card Numbers Work
Credit card numbers fall under identification card standards from the International Organization for Standardization (ISO). As a result, a straightforward formula dictates the format.
Credit card account numbers, also known as primary account numbers (PANs), consist of three main components, namely:
- Information about the card issuer
- Your account information
- A checksum
Information about the card issuer
Identification cards that follow ISO standards—including credit cards and debit cards—contain information about the card’s issuer. As a matter of fact, the first digit of your card is an industry identifier, which provides broad information about the issuer.
Credit Card Industry Numbers
Issuer identification number: The next six to eight digits are an issuer identification number (IIN). That number specifies which financial institution issued your card, which helps with routing payments.
Your Account Information
The remaining digits—except for the last digit—refer to your specific account, allowing the issuer to link payments to your personal account.
The last digit is a “checksum,” which helps to ensure that a credit card number is valid. Payment Processors use a process known as the Luhn Algorithm to apply the checksum. That series of steps provide a quick and easy way to determine that the numbers you provide for payment follow an acceptable pattern. Ultimately, the algorithm looks for an output that is divisible by 10, indicating that the card number is potentially valid.
The checksum provides basic quality control, but it does not provide robust protection against fraud. The algorithm is publicly available, so anybody can generate card numbers that satisfy the requirement. However, this is a helpful step to catch data entry errors and unsophisticated thieves quickly.
Card Number Lengths
Most credit card numbers range from 14 to 19 digits, and you can expect to see longer numbers in the future. Visa and Mastercard cards are often 16 digits long, although shorter and longer numbers exist. American Express cards have 15 digits, and Discover cards have 16 digits.
The ISO recognized that card numbers may run out unless issuers use more characters. As a result, IINs will switch to a minimum of eight digits, and your individual account number will be a minimum of 10 digits.
Your credit card account number contains essential information for processing payments, but in many cases, you also need a security code, also called a CVV.
When shopping online or by phone, you typically need to provide the security code to complete your purchase. Those codes help to verify that you have possession of the card and that you aren’t using a stolen credit card number. Your card number may be compromised in data breaches or by card skimmers, but getting the code is an additional hurdle for thieves.
Visa, Mastercard, and Discover cards display the three-digit code on the back of your card.
American Express cards show the four-digit security code on the front of the card.
From Card Numbers to Tokens
Traditional readers receive your credit card account information directly from a magnetic strip. It’s easy to steal a card number from a magnetic strip, and you expose your account number every time you swipe your card. Some merchants in the U.S. still use magnetic card readers, but technological advances, like the ones described below, provide safer ways to process payments.
Tokenization: Instead of providing card information to a merchant’s payment terminal “in the open,” new technologies replace your card information with a series of characters known as a token to help prevent fraud. A token can be much longer than the maximum card number of 19 digits, making it possible to add information about your transaction and making it harder for hackers to make sense of stolen data.
Mobile payments: When you pay with your mobile device, your device sends tokenized payment information to a payment terminal with near-field communication (NFC). You need to enter your card number in your device’s payment app before making mobile payments, but mobile devices do not transmit your card number.
EMV cards: Cards with a smart chip also protect your credit card number. Instead of swiping your card and providing an unencrypted account number, you insert your card’s chip into a chip reader. The chip contains a processor that communicates with the card to process your payment securely. That interactive process is hard for thieves to duplicate, and manufacturing chip-enabled cards is quite expensive for most thieves.