Insights

Credit and debit card numbers contain a lot of information that can be used by merchants for various applications. This article outlines two applications for analyzing card numbers – 1) understanding customers and card data through BIN analysis and 2) authenticating valid card numbers through “mod 10” checks.

I.  Numeric Structure of a Card
Typically, card numbers are all numeric and the length of credit/debit card numbers is between 12 digits to 19 digits.

• 14, 15, 16 digits – Diners Club
• 15 digits – American Express
• 13, 16 digits – Visa
• 16 digits – MasterCard

1. Major Industry Identifier (MII)
   The first digit of the credit card number is the Major Industry Identifier (MII). It designates the category of the entry which issued the card.
   • 1 and 2 – Airlines
   • 3 – Travel
   • 4 and 5 – Banking and Financial
   • 6 – Merchandising and Banking/Financial
   • 7 – Petroleum
   • 8 – Healthcare, Telecommunications
   • 9 – National Assignment
2. Bank Identification Number (BIN)
   The first 6 digits are the Bank Identification Number. It identifies the institution that issued the card. Some of the major BINs include:
   • Amex – 34xxxx, 37xxxx
   • Visa – 4xxxxxx
   • MasterCard – 51xxxx – 55xxxx
   • Discover – 6011xx, 644xxx, 65xxxx
3. Account Number
   Taking away the BIN and the last digit, remaining digits are a person’s account number.
4. Check Digit
   Last digit is known as check digits or checksum. It is used to validate the credit card number using Luhn formula or Mod 10 check.

For more information refer to: http://en.wikipedia.org/wiki/Bank_card_number and http://en.wikipedia.org/wiki/List_of_Issuer_Identification_Numbers

II.   Using Card Number for Bank Identification Number (BIN) Analysis
The first six digits of a credit/debit card are called a BIN (Bank Identification Number). Coupled with a BIN database, these numbers can tell a merchant the following among other details:

• card brand (e.g. Visa, MasterCard, AmEx, Discover)
• issuing bank (e.g. Wells Fargo, Chase, Bank of America)
• card type (credit or debit)
• card category (e.g. rewards card, business card, platinum card)

Most merchants can download transaction level detail with truncated card numbers from their merchant acquirer’s website. Truncated card numbers typically show the first six and last four digits of a card number. Cross referencing the BIN numbers from these truncated numbers with a commercially available BIN database or a BIN database from Optimized Payments, merchants can…

• steer consumers towards signature or PIN debit
• provide discounts based on card type (part of Durbin amendment)
• provide Level 3 data for certain commercial cards
• identify banks/card types that generate majority of chargeback losses
• identify banks/card types that generate majority of card declines
• identify banks/card types that drive majority of your sales…data could be used for marketing offers to certain card members

III.  Using Card Number for Mod 10 Check
Card numbers also contain basic logic that can be used to authenticate a valid card number. This logic, called “mod 10”, also known as “modulus 10” or Luhn formula, is a simple algorithm that can be run on every card authorization request before it is sent to a merchant acquirer for real-time authorization. So if a card number fails a “mod 10” validation, a merchant can immediately decline the card without having to waste money on authorization fees. Now, a mod 10 check only checks if a card number is valid…it detects single-digit errors, as well as almost all transpositions of adjacent digits. Mod 10 checks DO NOT verify whether the account is valid, if funds exist or if a transaction is allowed. If a card number passes a mod 10 check then these additional verifications can be confirmed with a real-time authorization.

Mod 10 Steps
Using 4147093842368012 as our example card number

1. Reverse the card number 2108632483907414
2. Starting with the first number, multiply the number by 1 and the next number by 2 and keep alternating…see picture below. If the result of multiplying a number by 2 is ten or greater (e.g. 2 x 8 = 16), add the two digits together to arrive at a single-digit result (e.g. 1+6=7).
   
3. Add up all the digits in this row
   
4. If the final sum is a multiple of 10 (without a remainder) then the credit card number is valid. If not, the card number is invalid.

We hope this helps you with understanding your card data and helps you reduce card processing costs. If you have questions or want to share how you analyze card data, please email us at info@optimizedpmts.com.