A customer asked me this at work and I didn’t know the answer!
In: Technology
All these things are controlled, not by the card, but by the bank’s computers.
When you verify your new card with your pin, your pin, encrypted both by your card and by the terminal, is sent to the bank’s computers for verification. So they know, and mark their record of the card as authorised to do contactless transactions.
Contactless transactions, too, are sent to the bank for verification.
Similarly, the contactless limit is also managed by the bank’s computers. The terminal send the purchase request, with a signature produced by the card’s chip, to the bank. The bank then sends back a reply that indicates whether the pin is required.
£45 what? I didn’t know this
Your bank card holds very little information. It’s the retailer terminal and the bank systems that know the limits and what has been activated etc after they identify the card.
The bank card itself holds just about enough info to identify which account to send the bill to for any transaction. The card reader and bank handle all the heavy lifting and remembering the rules.
Your bank card doesn’t know much at all. I’ve never looked into this in depth, but in theory all it has to know is its number. Everything else is done between the card system and the bank.
Say you tap your card at a store.
Card: Hiii! I’m card number XXXXXXXXX!
Card reader: *rings Visa* ‘ey yo, I got this card here, number so-and-so. Is he legit? Also, he tapped.
Visa: Yup, he’s legit. Under the limit, too, so just tell him it’s accepted and I’ll note it down.
the card doesn’t know these details. the card does not even know your PIN.
all these details are held in the banks’ big computers , and everytime you swipe or dip or use your card, the computers are contacted to verify and approve these.
The limit is in the terminal, not the card. It is set (at least here in Canada) by the merchant. Typically it is $200 here but places with higher fraud rates or typically smaller purchases might have lower limits or disable tap entirely.
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