Re: credit card conventional wisdom (fwd)

Date: Wed, 15 Nov 1995 18:07:25 -0800
From: Tom Wills <twills@eit.COM>
To: Simon Spero <ses@tipper.oit.unc.edu>
Subject: Re: credit card conventional wisdom (fwd)

The printed digits above the embossed account number are the first four
digits of the BIN (on Visa cards) or ICA (on MasterCards). They are there
to discourage re-embossing of the card with another account number.

Original Message:

>
>Wow, you learn something every day. I've never in
>my whole life (well, my American Express life,
>over 15 years) noticed those four digits. I've
>never been asked for them by anyone, or noticed
>them being written down, either. Exactly when and
>how are they used?

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  The printed digits above the embossed account number are the first four
  digits of the BIN (on Visa cards) or ICA (on MasterCards). They are there
  to discourage re-embossing of the card with another account number.

True for Visa cards, but false for the AMEX. On my
two Amex cards there is no obvious relationship
between the four digit number and the embossed
card number.

Greg.

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Further info:

  The AMEX digits aren't part of the standard info- someone I spoke to 
who started off as a grey box programmer said that he thought they were 
just process control. 

  Card-present/Card-not-present can be determined from info on the 
magnetic stripe; for visa cards, this info is stored in a three-digit 
checksum at the end of the discretionary info.

Card Imprints taken with no online authorisation are typically charged a 
transaction fee of 3-6%: with authorisation, 1.5-3%.  ATM card 
transactions  are charged at around $0.10 per transaction.


Simon

>Card Imprints taken with no online authorisation are typically charged a 
>transaction fee of 3-6%: with authorisation, 1.5-3%.  ATM card 
>transactions  are charged at around $0.10 per transaction.

are you saying that a typical mail order credit card transaction has
a 3-6% charge, because the card is not physically present?

this is a rather shockingly high rate.

again, what I have been calling the "fraud tax"-- it's hidden in every
purchase we make, and when we increase credit card security it will
increasingly be dissipated. but the problem is that no one realizes
this in general, and will argue, "why should we do anything to prevent
fraud? we are already not paying for it right now, why should credit
card companies spend any money to prevent it?"

BZZZZZZZT

I suspect these invisible fraud taxes are quite significant in general
and someone could really become very wealthy by inventing a system that
decreased them.

you might increasingly see retailers offer a "safe card discount"--
some brand of credit card charges them less transaction overhead, and
they pass these savings onto the customer.

or, the credit card company could send the money back to you like 
Discover does.

"Vladimir Z. Nuri" <vznuri@netcom.com> said:

>> Card Imprints taken with no online authorisation are typically
>> charged a transaction fee of 3-6%: with authorisation, 1.5-3%.  ATM
>> card transactions are charged at around $0.10 per transaction.

VZN> are you saying that a typical mail order credit card transaction
VZN> has a 3-6% charge, because the card is not physically present?

	No, s/he was talking about merchants who verify that you have
the credit available (online authorization) vs those who trust you to
have it (no online authorization).  As I understand it, the fee is
'insurance' that the merchant will be paid - as long as there is no
fraud on the part of the merchant, it will receive payment, even if the
charge was invalid, because the card was canceled/stolen/over limit/etc.
The lower charge for online authorization is because when the charge
comes back approved, the CC company is able to verify that the credit is
there.  This isn't foolproof (2 separate charges, each under the
available credit, can be approved even if the total exceeds the
available credit), but it's more than the offline merchants can do.

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