Credit Card Reader Key Terms

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

Credit card readers for your credit card process 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. 

Magstripe

A credit card reader functions by decoding information from the magnetic stripe or magstripe on the back of a credit card. 

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. 

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. 

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. 

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. 

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