How does a Point of Sale Magnetic Strip Reader Work?

//How does a Point of Sale Magnetic Strip Reader Work?

How does a Point of Sale Magnetic Strip Reader Work?

Credit and debit cards are one of the most common forms of payment people will encounter in today’s world. People use them to purchase items and services on a daily basis since they’re quick and easy to use. They make the buying and selling of items so much easier since the process can go along much quicker.

How do point of sale magnetic strip readers work? While many people know how to use a credit or debit card, very few people know how the process actually works.

What is Stored in a Magnetic Strip?

There are all sorts of different payments, but today we’re going to be focusing on how point of sale magnetic strip readers work. Credit and debit cards each have a black line that runs along the back of the card. This black line is known as the ‘magnetic strip’. The magnetic strip contains a few elements that make strip readers able to access the information stored on the card.

The magnetic strip contains tiny magnetic particles that are housed within the plastic. These particles are about 20 millionths of an inch in length, so they’re very tiny. The date is stored by the orientation of each particle.

Reading Three Tracks of Data

point of sale magnetic stripe readerWhen the point of sale magnetic strip reader has a credit or debit card swiped through it, it reads three tracks of data off of the card. Each of these tracks of data are about one tenth of an inch wide for the strip reader to read. The first and second tracks on the card have information encoded upon them about the account of the cardholder. This information can include the country code, the credit card number, the expiration of the card, and even the full name of the cardholder. The third track usually contains additional information that may be needed.

The technology behind reading credit and debit cards has improved by leaps and bounds the last couple of years. This new generation of credit cards for example can be read without any contact being made, so there’s no reason to have the magnetic strip. The way it works is that the contactless card is tapped or held near the card read. Smart chip technology is another one that has seen a rise in popularity too in many stores.

What Happens with the Information Stored on the Card Once it’s been Read?

Once the point of sale magnetic strip reader has read the information on the card, the next step can take place. When the card is swiped through the terminal the information on the card is send to the bank. The reason for this is to complete the credit card transaction for the sale. This information is usually transmitted through either a dedicated network connection or a modem phone connection.

The computers than use this information to verify the account of the cardholder to make sure they have enough credit to cover the purchase. Once it’s been approved, the computer sends a response stating it’s authorized. The transaction may be decline, and in this case the computer provides a reason as to why the card was declined.

Why Are Strip Readers Important?

The majority of businesses have strip readers to make transactions between the customer and store more convenient. There’s no reason to open the cash drawer to handle change or count out the correct coins or dollars for the customer. Strip readers save time, money, and help to keep the line moving during busy periods. While the technology to read debit and credit cards has continued to move forward, strip reader are still one of the most common ways to read these cards.

Strip readers make the transaction process easier for not only the customer, but for the store too. Cards are easier to carry then cash and are much more secure too.

 

By | 2016-05-05T14:03:40+00:00 May 5th, 2016|Point of Sale|Comments Off on How does a Point of Sale Magnetic Strip Reader Work?

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