hi,
It is worth knowing about this. Check it out..........
Regards,
Soumya Shankar
--------------------------------------------------------------------------------
Credit Cards (Lun MOD 10)
The length of a credit card can be either 13 or 15 or 16 characters. The first digit is called the MIF or the major industry identifier. The various values are as follows.
0 ISO/TC 68 and Other Industries
1 Airlines
2 Airlines and Other Industries
3 Travel and Entertainment
4 Banking and Financial
5 Banking and Financial
6 Merchandizing and Banking
7 Petroleum
8 Telecommunications and Other Industries
9 National ( Local Use )
Most of us will carry credit cards beginning with 4 or 5. A petrol card will begin with 7. The first 4 to 6 digits are called the issuers code and they tell us which entity issued us the card. Some well known issuers are as.
Issuer's Code
The first four digits
Card Issuer
Number of Digits
3000 to 3059
3600 to 3699
3800 to 3889
Diners Club
14
3400 to 3499
3700 to 3799
American Express
15
3528 to 3589
JCB
16
3890 to 3899
Carte Blanche
14
4000 to 4999
Visa
13 or 16
5100 to 5599
MasterCard
16
5610
Australian BankCard
16
6011
Discover / Novus
16
The remaining 10-12 bits are the actual credit card number. These numbers are not just randomly generated by the credit card companies but are generated such that they meet a certain rule. This rule or algorithm called the Luhn algorithm. The International Standards Organization (ISO/IEC 7812-1:1993) and the American National Standards Institute (ANSI X4.13) have now standardized on the above algorithm for credit card number validation.
Lets take a dummy Visa card and apply the Luhn algorithm to it.
4567 1234 5678 9129
We first start from the right and this last digit is called the check sum. We start with the rightmost –1 digit and multiply every other digit by 2.
4 5 6 7 1 2 3 4 5 6 7 8 9 1 2 9
8 12 2 6 10 14 18 4
We then subtract 9 from any number larger than 10. Thus we get.
8 3 2 6 1 5 9 4.
Another way out is by adding the individual digits.
We then add them all up to get
38
We then add all the other digits to get
42
The sum of the two is 80 which will add up to a number divisible by 10. Thus the above algorithm is called the Luhn modulus 10. The last digit is called the check digit as it is the one used to make sure that we get a final number divisible by 10. We have a 90% reliability with the Luhn algorithm.
From India, Bangalore
16It is worth knowing about this. Check it out..........
Regards,
Soumya Shankar
--------------------------------------------------------------------------------
Credit Cards (Lun MOD 10)
The length of a credit card can be either 13 or 15 or 16 characters. The first digit is called the MIF or the major industry identifier. The various values are as follows.
0 ISO/TC 68 and Other Industries
1 Airlines
2 Airlines and Other Industries
3 Travel and Entertainment
4 Banking and Financial
5 Banking and Financial
6 Merchandizing and Banking
7 Petroleum
8 Telecommunications and Other Industries
9 National ( Local Use )
Most of us will carry credit cards beginning with 4 or 5. A petrol card will begin with 7. The first 4 to 6 digits are called the issuers code and they tell us which entity issued us the card. Some well known issuers are as.
Issuer's Code
The first four digits
Card Issuer
Number of Digits
3000 to 3059
3600 to 3699
3800 to 3889
Diners Club
14
3400 to 3499
3700 to 3799
American Express
15
3528 to 3589
JCB
16
3890 to 3899
Carte Blanche
14
4000 to 4999
Visa
13 or 16
5100 to 5599
MasterCard
16
5610
Australian BankCard
16
6011
Discover / Novus
16
The remaining 10-12 bits are the actual credit card number. These numbers are not just randomly generated by the credit card companies but are generated such that they meet a certain rule. This rule or algorithm called the Luhn algorithm. The International Standards Organization (ISO/IEC 7812-1:1993) and the American National Standards Institute (ANSI X4.13) have now standardized on the above algorithm for credit card number validation.
Lets take a dummy Visa card and apply the Luhn algorithm to it.
4567 1234 5678 9129
We first start from the right and this last digit is called the check sum. We start with the rightmost –1 digit and multiply every other digit by 2.
4 5 6 7 1 2 3 4 5 6 7 8 9 1 2 9
8 12 2 6 10 14 18 4
We then subtract 9 from any number larger than 10. Thus we get.
8 3 2 6 1 5 9 4.
Another way out is by adding the individual digits.
We then add them all up to get
38
We then add all the other digits to get
42
The sum of the two is 80 which will add up to a number divisible by 10. Thus the above algorithm is called the Luhn modulus 10. The last digit is called the check digit as it is the one used to make sure that we get a final number divisible by 10. We have a 90% reliability with the Luhn algorithm.
From India, Bangalore
Good Information... To round it off... all the numbers add to only one thing... Unlimited spending = Very High Debt.. :twisted: :lol: :twisted:
From India, Ahmadabad
From India, Ahmadabad
That was some info!!
Now that we know about credit card numbers,how about learning how credit card shopping works? :) Here's an intresting narrative which talks about the whole process in a very simple manner :-
Priya: I want to buy a Sony digital camera costing Rs.20,000, but I don?t have any cash right now.
Raj: Why don?t you use your ICICI Bank credit card? Never heard them say ? Hum Hain Na ??
Priya: I am quite skeptic about using these cards. I pay using the card, get a bill after 30 days and pay after another 20 days. This is a maximum of 50 days interest free loan. Why does any bank do it?
If I borrow Rs.20,000 on personal loan at 11%.
Interest to be paid for 50 days = Rs. 20,000 * 11% * (50/365) = Rs. 301.40.
Here the bank is giving me a loan without interest when I use the credit card. Something is wrong somewhere!
Raj: Well? let me tell you how it works when you use your card to pay for the camera. You present your ICICI Bank credit card or a VISA card.
Sony World swipes your card on a machine provided by Citibank. Lets call Citibank ? the acquirer bank and the process of Sony World swiping the card on that machine ? requesting authorization .
Citibank communicates with the card issuer ICICI Bank through VISA Network to check if the card is valid and has the required credit limit.
ICICI Bank reviews and approves / declines which is communicated back to Sony World.
You sign a receipt called Sales Draft given by Citibank. This is the obligation on your part to pay the money to ICICI Bank. Data on this receipt can be captured electronically and transmitted.
At the end of day or at the end of some period Sony World chooses:
Sony World submits the receipt you signed to Citibank who pays Sony World the money. Sony World pays Citibank a fee called Merchant Discount . Let us say this is 6% of the sale value = 6% * 20,000 = Rs. 1200
Citibank sends the receipt electronically to a Visa data center which in turn sends it to ICICI Bank.
ICICI Bank transfers the money to a settlement bank which in turn transfers the funds to Citibank.
Citibank pays ICICI Bank an Interchange Fee of 4% of the sale value = 4% * 20,000 = Rs. 800
20 to 50 days later ICICI Bank gets the money from you ? and you don?t pay the interest!!
Priya: Interesting! So Sony World pays more than the interest that I should have paid for the loan that I take. I, as a cardholder have the following benefits
1. Convenience of not having to carry cash.
2. Credit availability ? free of interest.
However what benefits does Sony World get for paying so much money? Isn?t it more profitable for them to take cash? They can save as much as Rs.1200.
Raj: Certainly. Some retail outlets offer you discounts if you pay by cash, don?t they?
However when you don?t count the money that you are spending, you tend to buy more! Cards encourage this ? called impulse purchase .
If you did not have access to credit, you would not have bought the camera this month ? or may! be not any time soon either. By accepting cards, the merchant is actually extending you credit at the risk of the card issuer. He pays money to the banks to carry that risk.
Priya: So ICICI Bank uses this money to pay back to us when they announce 5% cash back. They insist that the Sales draft that I sign at the retailer should also be from ICICI Bank. This means they are saving on the Interchange Fee and also pay me a part of the Merchant Discount that they get.
Raj: Exactly! If you have noticed, ICICI Bank gives y! ou the cash back in the next credit card statement. They keep the ?cash back? money for a maximum of 60 days before passing on a part to you. This accrues them interest too.
Say if ICICI Bank earns an interest of 6% per annum for the cash they carry ? they get Rs.1000 * 6% * (60/365) = Rs. 10
That is not huge, but money nevertheless. And when you consider that almost everyone in this city shops with a credit card these days, it is a big sum.
Priya: And that also explains why banks tie up with petrol pumps ? like ICICI Bank has tied up with HPCL and I could re-! fuel there without having to pay the fuel surcharge of 2.5%. The card issuer and the acquiring bank is the same and that saves interchange fees.
Raj: Good! You seem to have figured out how it all works!
Priya: Sooper! Toh ab shopping chalein?? Lets not miss the Namma Bengaluru Shopping Festival!
All the numbers used to explain concepts in this article must be treated only as an example. Merchant Discounts may vary from bank to bank. Interchange Fee is regulated by VISA and MasterCard.
--------------------------------------------
Hope that proved useful :)
From India, Hyderabad
Now that we know about credit card numbers,how about learning how credit card shopping works? :) Here's an intresting narrative which talks about the whole process in a very simple manner :-
Priya: I want to buy a Sony digital camera costing Rs.20,000, but I don?t have any cash right now.
Raj: Why don?t you use your ICICI Bank credit card? Never heard them say ? Hum Hain Na ??
Priya: I am quite skeptic about using these cards. I pay using the card, get a bill after 30 days and pay after another 20 days. This is a maximum of 50 days interest free loan. Why does any bank do it?
If I borrow Rs.20,000 on personal loan at 11%.
Interest to be paid for 50 days = Rs. 20,000 * 11% * (50/365) = Rs. 301.40.
Here the bank is giving me a loan without interest when I use the credit card. Something is wrong somewhere!
Raj: Well? let me tell you how it works when you use your card to pay for the camera. You present your ICICI Bank credit card or a VISA card.
Sony World swipes your card on a machine provided by Citibank. Lets call Citibank ? the acquirer bank and the process of Sony World swiping the card on that machine ? requesting authorization .
Citibank communicates with the card issuer ICICI Bank through VISA Network to check if the card is valid and has the required credit limit.
ICICI Bank reviews and approves / declines which is communicated back to Sony World.
You sign a receipt called Sales Draft given by Citibank. This is the obligation on your part to pay the money to ICICI Bank. Data on this receipt can be captured electronically and transmitted.
At the end of day or at the end of some period Sony World chooses:
Sony World submits the receipt you signed to Citibank who pays Sony World the money. Sony World pays Citibank a fee called Merchant Discount . Let us say this is 6% of the sale value = 6% * 20,000 = Rs. 1200
Citibank sends the receipt electronically to a Visa data center which in turn sends it to ICICI Bank.
ICICI Bank transfers the money to a settlement bank which in turn transfers the funds to Citibank.
Citibank pays ICICI Bank an Interchange Fee of 4% of the sale value = 4% * 20,000 = Rs. 800
20 to 50 days later ICICI Bank gets the money from you ? and you don?t pay the interest!!
Priya: Interesting! So Sony World pays more than the interest that I should have paid for the loan that I take. I, as a cardholder have the following benefits
1. Convenience of not having to carry cash.
2. Credit availability ? free of interest.
However what benefits does Sony World get for paying so much money? Isn?t it more profitable for them to take cash? They can save as much as Rs.1200.
Raj: Certainly. Some retail outlets offer you discounts if you pay by cash, don?t they?
However when you don?t count the money that you are spending, you tend to buy more! Cards encourage this ? called impulse purchase .
If you did not have access to credit, you would not have bought the camera this month ? or may! be not any time soon either. By accepting cards, the merchant is actually extending you credit at the risk of the card issuer. He pays money to the banks to carry that risk.
Priya: So ICICI Bank uses this money to pay back to us when they announce 5% cash back. They insist that the Sales draft that I sign at the retailer should also be from ICICI Bank. This means they are saving on the Interchange Fee and also pay me a part of the Merchant Discount that they get.
Raj: Exactly! If you have noticed, ICICI Bank gives y! ou the cash back in the next credit card statement. They keep the ?cash back? money for a maximum of 60 days before passing on a part to you. This accrues them interest too.
Say if ICICI Bank earns an interest of 6% per annum for the cash they carry ? they get Rs.1000 * 6% * (60/365) = Rs. 10
That is not huge, but money nevertheless. And when you consider that almost everyone in this city shops with a credit card these days, it is a big sum.
Priya: And that also explains why banks tie up with petrol pumps ? like ICICI Bank has tied up with HPCL and I could re-! fuel there without having to pay the fuel surcharge of 2.5%. The card issuer and the acquiring bank is the same and that saves interchange fees.
Raj: Good! You seem to have figured out how it all works!
Priya: Sooper! Toh ab shopping chalein?? Lets not miss the Namma Bengaluru Shopping Festival!
All the numbers used to explain concepts in this article must be treated only as an example. Merchant Discounts may vary from bank to bank. Interchange Fee is regulated by VISA and MasterCard.
--------------------------------------------
Hope that proved useful :)
From India, Hyderabad
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