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The Complete Beginner's Guide to Magnetic Stripes

Magnetic stripe on back of plastic card image

The magnetic stripes on the back of a credit card or gift card store small bits of information. Magnetic card readers retrieve that information when the credit card is used to make a purchase. The magnetic stripe, or magstripe, is made up of tiny iron-based magnetic particles in a plastic-like film. Each particle is really a very tiny bar magnet about 20 millionths of an inch long. Magnetic stripe cards are commonly used in credit cards, identity cards, gift cards, and point-of-sale-activation (POSA) cards.

Each stripe contains three tracks. Each track is basically just a single physical (but invisible) line on the magnetic stripe. Standards have been developed for encoding these tracks. Information redundancy has also been built in. This means that if the first track of the magnetic stripe is damaged, the second track can still carry enough information to use the credit card to make purchases. Point-of-sale card readers almost always read track 1, or track 2, and sometimes both, in case one track is unreadable.

Magnetic stripes can typically be read by most point-of-sale hardware, which are simply general-purpose computers that can be programmed to perform specific tasks. Examples of cards adhering to these standards include ATM cards, bank cards (credit and debit cards including VISA and MasterCard), gift cards, loyalty cards, driver's licenses, telephone cards, membership cards, electronic benefit transfer cards (e.g. food stamps), and nearly any application in which value or secure information is not stored on the card itself. Many video game and amusement centers now use debit card systems based on magnetic stripe cards.

Magstripes come in two varieties: high-coercivity (Hi/Co) and low-coercivity (Lo/Co). High-coercivity magstripes are harder to erase, and therefore are appropriate for cards that are frequently used or which need to have a long life. Low-coercivity magstripes require a lower amount of magnetic energy to record, and hence the card writers are much cheaper than machines which are capable of recording high-coercivitymagstripes. Both high-coercivity and low-coercivity cards have three tracks for encoding.

The advantage of high coercivity is that it is harder to encode the information on the stripe. This also means that it is more difficult to erase the information and so problems of accidental erasure are diminished. It is still possible to erase the information, but common household magnets are not usually powerful enough. This means the person who puts the transit card on the refrigerator will not usually damage the encoding on the stripe. The disadvantage of high coercivity is that although the encoding can be read in a standard low coercivity reader, the encoder must be designed to encode high coercivity stripes.

Plastic card with magstripe track 1 track 2 track 3

Card Track One
Track one is the only track that contains the name of the account holder. This track also contains the information of the card issuing bank, including the credit account number, cardholder billing address, country code for the account, expiration date of the account and a three digit service code. The service code communicates to a buyer how the card must be billed, if the buyer has international purchasing privileges or just national purchasing privileges and whether or not a PIN number is required for purchase approval. Track 1 holds 79 alpha/numeric characters.

Card Track Two
Track two in the magnetic stripe of a credit or debit card stores very similar information to track one with several important differences. Track two only stores numeric code, whereas track one stores alphanumeric code. This means track two cannot store information containing letters, only numbers. Track two may also include the primary account number and discretionary data like PIN number verification and the criteria for purchase approval. According to the Plastic Rewards website, one purpose of track two is to review the information sent from the credit card to the scanner to ensure all the information is read correctly and no errors occur. Track 2 stores 40 numeric characters.

Card Track Three
This track is not used by national bank card issuers. Retailers and other businesses may use track three for purchasing data storage including any PIN required to access the account and total available credit. No standard exists for data stored on track three as exists with tracks one and two. Some credit cards with very narrow magnetic strips do not contain a third data track. Track 3 holds 107 numeric characters.

To produce your magnetic stripe cards correctly:

  1. We need to know which type of magnetic stripe: low coercivity (LoCo) or high coercivity (HiCo)
  2. Indicate which track to encode the data (usually track 1 or track 2, or both 1 & 2)
  3. A data file (Excel, .csv, .txt) with the information that we need to encode onto the magnetic stripe

It is best to have all your information at the time you place your order. Fortunately, it's easy to obtain – just contact your POS system provider or technical support department.

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