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Credit cards

Credit cards

In the twentieth century, the usual money began to change. In the 1970s, a magnetic stripe was applied to them, and in the late 1990s, chips were already embedded in these calculation tools.

The cards were originally owned by very wealthy people, allowing them to get unlimited loans. At the same time, fraudsters appeared who use this.

Today, bank cards are very common, because they can be used to make payments in any country of the world without transporting bundles of bills. We will consider these delusions.

The card itself stores the balance of the money in the account. In fact, there is no money on a regular debit card, even if it is chipped, and even more so on a credit counter. After all, the card serves as an identifier. There are, of course, exceptions. Some chip cards have wallet applications. This can be a discount program, virtual funds (for example, liters of fuel). But this is not directly related to the usual use of the card. And you can activate such applications only in special outlets that support such a unique type of cards.

If the store wants to accept payments using bank cards, then it will need to connect to the international system - Visa, Mastercard, etc. No one will just let you directly connect directly to these large payment systems. It is available either to independent processing centers or large banks. After all, cooperation with Visa or Mastercard implies special expensive equipment, safety certificates, impressive insurance accounts and other nuances. Even not every bank is capable of such spending. So those who want to accept cards will have to use the services of local banks.

Terminals for accepting payments or ATMs are connected directly to the Visa or Mastercard. Major international payment systems do not have their own ATMs or payment terminals. All of them certainly either belong to some bank or through them have the ability to connect to the global payment system.

There is a certain amount on the card. This is what you can spend. In fact, the account balance and the amount that can be spent per day are not particularly related. Better to talk about the daily limit on the map. But it depends on many factors and may be more than the balance on the account, and less than it. Even if the account has an amount of several million, the system will hardly allow you to withdraw more than a few thousand per day. And this is not at all a hardware limitation of the ATM itself. On the other hand, a particularly valuable client with an impressive account can, if necessary, make a call to the bank and significantly increase his limit. Today, among other things, reasonable changes to the daily limit are available to most customers by calling with authorization. The bank may take responsibility for slightly changing the rules.

The PIN-code of the card is checked either by the ATM itself or by the payment terminal. Almost always, using a card means connecting with the bank that issued it. Even if the Sberbank card is used at an American ATM, a request will be sent to Russia to verify the PIN. This system works precisely because the code can only be verified by the bank that issued the card. The exception is cards with a chip. They can check the PIN themselves, because the chip card is essentially a minicomputer, which also performs encryption functions. Sometimes, when using cards to pay for a purchase, rather than when withdrawing cash, the merchant may not even contact the authorization center for each purchase. This can happen if the amount is less than a certain limit. This is relevant for small amounts, when the cost of the purchased product is less than the cost of the exchange session via the electronic channel with the bank. As a result, taking into account small amounts, day counters can be used for authorized cards. After all, there are no risks of large losses due to the actions of fraudsters due to the size of the transactions.

The PIN-code is recorded on a magnetic stripe, it can be stolen by any fraudster, as soon as the card gets into his hands. On the magnetic stripe, there is actually a cryptographic verification of the PIN and card number, which will be obtained using a cryptographic key stored under guard at the bank. In other words, using the data from the magnetic stripe, the PIN can only be verified, and even then, knowing only the super-secret key. Data is usually encrypted using the 3DES algorithm. The same protected "key" is a hardware device for storing data and performing encryption operations with them. In other words, after the initial input of the keys into this device in their pure form, they do not come out. In addition to the usual protection of such devices, they are also equipped with protection against intrusion. If you just try to open the case to install the "bug", all keys will be automatically destroyed immediately.

The method of initial key entry is also interesting. To begin with, several bank security officers are selected. Ideally, they shouldn't know each other personally at all. Everyone generates their own version of the key without showing it to anyone. Then they take turns entering the room where the key storage equipment is located and entering their data. When all keys are entered, the device performs an XOR (logical addition) operation between them. This is how the final key is formed, which is written to the device. It turns out that no one knows him at all. For recovery, you need to obtain the original data from each of the selected employees, who undertake to keep this confidential information. And do not think this level of security is excessive, sometimes you need to include administrative measures, because sometimes cryptography can be defeated by a simple human factor.

The PIN code can be shared with bank employees. No bank employee should ever ask for a customer's PIN. True, often the users themselves, when they call at the bank, answering a secret question (it is formed when opening an account) name their own PIN-code.

After making a purchase, the money is immediately transferred from the client's account to the store account. In fact, the real exchange of electronic means takes place only at the end of the working day. And at the time of purchase, only the “spent” amount is blocked. The actual write-off will generally take place in a few days, when the bank that owns the account receives financial confirmation from the bank through whose terminal the payment was made.

The amount entered in the check after payment with the card will be accurately debited from the account. The actual amount debited upon authorization may be different from the amount debited upon the financial transaction. This is especially true when paying for hotels or car rentals. It happens that outlets can write off some additional expenses in pursuit. This can be a shortage of gasoline or an unpaid breakfast. These are just some of the outlets that are allowed to increase or decrease the final amount. The amount blocked during authorization may also differ from what will ultimately be debited from the account if the account currency differs from the transaction currency. The fact is that the actual withdrawal of funds occurs in 1-2 days, during this time the conversion rate may change slightly.

The amount blocked on the account after payment with the card will sooner or later be debited from the account. In fact, the amount blocked during authorization may never be debited from the account at all. For an ATM, the critical period is 10 days, and for other terminals - 45. If the bank does not receive financial confirmation of the transaction from the payment system used by the person during this time, the money will be unlocked. This has its advantages and disadvantages. The advantages lie in the fact that an operation was performed that must be abandoned. Then, after calling the bank, you can explain the reason for the refusal, if possible, the operation will be canceled and the blocking will be removed. True, if the bank still receives financial confirmation from the outlet, then it will have to figure it out on its own, without the participation of the client and his funds. The disadvantages lie in a situation where the client contacted the bank after receiving financial confirmation. Then it will be more difficult to undo the operation. The bank will have to launch an official investigation, which could drag on for 45 days. And all this time, the purchase amount will remain blocked, inaccessible to the client.

If a person owns a debit card, then he cannot prove to be indebted to his bank. It seems logical that credit card holders can go negative. But is this possible for debit card holders? In fact, as already mentioned, the authorization logic is based not on the real amount on the account, but on the daily limits. So both credit card and debit cardholders can end up in the red. This happens if the bank sets daily limits that will slightly exceed the account balance, even for debit cards.

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