How does a new bank card know whether you have entered your pin once to then activate contactless payments? And how did all bank cards know when the contactless limit on card went up from £30 to £45 in the UK?

Question

A customer asked me this at work and I didn’t know the answer!

In: Technology

Answer 1

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.