Saturday 5 April 2014

How a Debit Card works?

When someone swipes a debit card through a merchant terminal, the terminal reads the magnetic strip on the back of the card and transmits the data to a card processing network such as VISA, Master Card, Maestro, RuPay(by NPCI) etc.

The transmitted data includes the merchant's name and location, and entered Personal identification number, PIN in the encrypted form.

The network performs a fraud analysis and forwards the information to the bank that issued the debit card.

The issuer then validates that the card hasn't been reported as stolen or lost, confirms whether funds are available in the cardholders account and then notifies the merchant, again through the network, whether the transaction has been approved.

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