*This is about legal activities* POS Card activations, and encoding

[RiverBoatBTC]

**** This is in regards to legal activities please do not disclose any way for people to use this in illegal ways *****

I do not know a freaking iota about plastic card encoding I am looking for a couple of answers.

How do gift cards get activated at the register?
How hard is it to implement or get encoding in order to work with all POS that take visa/MC?
I understand that their is a track 1 & 2 but have no clue what each one does.


Any help would be great! I am just looking for a basic understanding.

[Peter R]

Could you explain in a bit more detail what you want to do?  Are you looking to have PoS hardware just read data from a magnetic stripe that you wrote to the card previously?  

Another question: with the world moving to contact (chip+pin) and contactless (NFC) smartcards, have you considered using this technology instead?  Magnetic stripes are so 1970s 

[RiverBoatBTC]

I just need a card that can be activated at any cash register honestly, I was just trying to learn the process while doing it. information is power but Pos companys do not like people to know how it works for security reasons I imagine.

[DannyHamilton]

How do gift cards get activated at the register?

The gift card stores the gift card account number on it (and some other verification information).

When the card is "activated", the register transfers this account information to the payment processor that communicates it back to the gift card issuer.  The gift card issuer then updates their own database to indicate that the account can now be used.  If someone tries to use a card that has not yet been activated, then the card issuer sees in their database that the card isn't active and sends a "rejection" message back through the payment processor.  If someone uses a card that is active, then the issuer updates their database with the new balance.

How hard is it to implement or get encoding in order to work with all POS that take visa/MC?

You would either need to start your own payment processing company and get contracts with individual merchants to process payments for them (and then write the software to interface with their POS), or you would need to get a contract with a payment processing company and have them submit the information to you so you can maintain all the card accounts. Getting such a contract would at a minimum require significant audits, and proof that your system has met all the requirements of PCI compliance.

[RiverBoatBTC]

How do gift cards get activated at the register?

The gift card stores the gift card account number on it (and some other verification information).

When the card is "activated", the register transfers this account information to the payment processor that communicates it back to the gift card issuer.  The gift card issuer then updates their own database to indicate that the account can now be used.  If someone tries to use a card that has not yet been activated, then the card issuer sees in their database that the card isn't active and sends a "rejection" message back through the payment processor.  If someone uses a card that is active, then the issuer updates their database with the new balance.

How hard is it to implement or get encoding in order to work with all POS that take visa/MC?

You would either need to start your own payment processing company and get contracts with individual merchants to process payments for them (and then write the software to interface with their POS), or you would need to get a contract with a payment processing company and have them submit the information to you so you can maintain all the card accounts. Getting such a contract would at a minimum require significant audits, and proof that your system has met all the requirements of PCI compliance.

Thank you for the great info, this is kinda what I gathered after talking to a couple of card company's they said the are able to encode them if the processors will give up the encoding information to do it.

So on my end I would need a system to accept the transmission accept the activation? So it would go something
Register -> payment processor -> my data base? with a yes or no on activation.

[DannyHamilton]

So on my end I would need a system to accept the transmission accept the activation? So it would go something
Register -> payment processor -> my data base? with a yes or no on activation.

You'd have to talk to the payment processors and see what their communication protocols require.

I suspect there is a lot more validation in the communications then that, but at the most basic level, that's probably correct.

Keep in mind that the payment processor needs to be very sure that they are actually communicating with you and not an imposter.  There will probably be some form of encryption and digital signatures used in the communications.  They will probably have required specifications for the data that is passed back and forth.  Activation may include a message indicating how much value to load into the account. Account numbers may be required to have a particular number of digits, and those digits may have checksums, issuer identification values, and parity bits that allow the processor to verify that the number was read correctly by the POS and determine which issuer to send the messages to.  The card processor may also include information such as a merchant ID so you can track where the card was activated.