What Really Happens When You Swipe Your Parents' Credit Card???

The Magstripe: Every back of a credit card has a magnetic strip, also called a magstrip. On the magstrip, there are tiny bar magnets, ones like we have studied, but there about 20 millionths of a inch long. This particles/bar magnets create a code like a tape recorder, and can be magnetized in a north or south pole direction.
megnetic stripe shown at the top of credit card
bar magnets

Swiping=Motor: In order for a an ATM, or other credit card reader, to detect the credit card code, it has to have some type of motor. Instead of needing a motor, like ones we built in class, all you need to do is swipe a credit card in a reader. The movement through the reader acts exactly like a motor. The swiping movement causes the magnetic field to become a current in the system, alowing the electronics to be picked up. If you do not "swipe" there will be no current giving you a "dead battery".
Hand Swiping Credit Card acts like a motor

The Tracks of the Magstripe: The magstripe has 3 different tracks each .11 inches wide. These tracks hold different information and typically banks only use tracks 1 and 2.

Track 1
Part A: Reserved for proprietary use of the card user.
Part B:
  • Primary account number-up to 19 characters
  • Country Code-3 characters
  • Name- 2-26 characters
  • Expiration Date-4 characters
  • Discretionary Data-amount of space left
Track 2
  • Primary account number-up to 19 characters
  • Country Code-3 characters
  • Expiration Date-4 characters
  • Discretionary Data- amount of space left
Track 3--not standardized among different banks
  • encrypted PIN
  • Country Code
  • Currency Units
  • Amount Authorized

Reading the Magstripe: When you swipe your credit card, it goes through an electronic data catcher (ECD). When the card goes through a EDC reader it contacts an acquirer. An acquirer is an organization that makes sure the credit card information is valid. It checks the merchant ID, valid card number, expiration date, credit card limit, and card usage. ECD transaction processes 1200-2400 bps which means this transaction is really fast.

The video above shows a credit card being swiped, and how the information is transferred through a computer that reads the characters.
(Ignor the sound. To understand all the extra technology involved, click more info below the video in the Youtube window.)

Main Source of Information: HowStuffWork
Pictures are from Google Images
Extra information on topic: HighTechAid