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Who has access to credit card validation ?

  1. May 7, 2015 #1

    Stephen Tashi

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    Do merchants who accept a particular brand of credit card pay the credit card company for access to the system that "validates" cards of that brand when a purchase is made? Are the merchants the only parties who can access the validation system?
  2. jcsd
  3. May 7, 2015 #2


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    Gold Member

    I've always assumed that merchants wire the # to the C.C. company which then does the validation and sends back a yes/no. Any merchant who get too many "no" responses would be assumed to be fishing for valid card numbers and banned. I can't imagine that C.C. companies would give out the algorithm that they use to validate cards.

    Keep in mind that this is all based on total ignorance and a willingness to express my opinion whether it's right or wrong :smile:
  4. May 7, 2015 #3


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    Staff: Mentor

    The data is sent to the card company and the only information the merchant gets back is accepted or declined. The reason is not given, the cardholder would need to call their company to find out what the problem is if it's declined. It could be that they've gone over their limit or have a late payment, those are probably the top two reasons for being declined.
  5. May 7, 2015 #4

    Stephen Tashi

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    I'm under the impression that validating a credit card company would rely on a database that had detailed info about the card and it's activity rather than relying on some encryption-decryption scheme that only determined if the credit card number was an actual credit card number.

    I'm curious whether the merchant must "register" with the credit card company to get access to the verification service. Or perhaps merchants deal with "middlemen" -companies that verify cards of several brands. Perhaps these middlemen deal with the individual credit card companies.
  6. May 7, 2015 #5
    Here is a pretty good explanation
    https://help.yahoo.com/kb/yahoo-merchant-solutions/credit-card-payment-processing-works-sln22065.html [Broken]
    Last edited: May 7, 2017
  7. May 8, 2015 #6

    Stephen Tashi

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    That is an interesting link. It shows the middleman for Yahoo as "First Data Merchant Services". (A page of critical reviews http://www.yelp.com/biz/first-data-merchant-services-houston for a company of that name mentions Paypal and Stripe as competitors.)

    It isn't clear how access to credit card information is set-up. Does the middleman pay the Bank that issues the card for access to the information? Or are the middleman's services so essential that the bank might pay the middleman to feature their card? How does the company that owns global brand (e.g. "VISA") get into the act with specific banks that offer a credit card by that brand name (e.g. a Melverton City Trust Bank VISA card) ?
    Last edited by a moderator: May 7, 2017
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