Credit Card Readers Key Terms

Get the low down on basic and technical vocabulary for credit card readers

Credit card readers come in all shapes and sizes. They may be plugged directly into a computer or cash register, or they can be a stand-alone unit. A reader that only assesses credit cards is a rarity. Usually card readers will also read debit cards, and may be called upon to read benefits cards, gift cards, ID cards and almost anything with a magnetic stripe. Use these key vocabulary terms to make the right choice for your business needs.

 

Credit card reader

The term "credit card reader" has developed into a bit of a misnomer, because the magnetic stripe readers originally designed to read credit cards now read a much wider variety of magnetic stripe cards than those simply used for credit.
Try: wiseGEEK explains how magnetic stripe readers developed and what purpose credit card readers serve today.

Magstripe

A credit card reader functions by decoding information from the magnetic stripe or magstripe on the back of a credit card.
Try: AIM Global explains in detail how the magnetic stripes on your credit, debit and other magstripe cards work and how they're created.

Tracks

In the context of credit card readers, tracks refer to the three separate areas for storing information in the magnetic stripe on a credit card. All credit card readers gather information from the second track. Some read information like the cardholder's name from the first track, but use of the third track has not been standardized by banks.
Try: HowStuffWorks explains how information is stored in the magstripe tracks on your credit card, and what information is stored where.

ISO/IEC standard 7811

The ISO/IEC standard 7811, followed by banks that issue credit cards and debit cards, dictates the size and capacity of each of the tracks on the magstripe.
Try: The International Organization for Standardization offers the full text of the relevant standards as they relate to bank card magstripes.

American Bankers Association

The American Bankers Association (ABA) standardized the use of track 2 on a credit card's magstripe, thus standardizing much of a credit card reader's function.
Try: American Bankers Association explains its role in unifying and enhancing the banking industry.

Coercivity

Coercivity refers to the permanence of a magnet. It's harder to accidentally demagnetize a high coercivity magnetic stripe card than a low coercivity card. Most credit card readers can read either high or low coercivity magnetic stripe cards.
Try: ID House explains the difference between high coercivity and low coercivity encoding on cards.

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