This is with respect to the magnetic strip on the back, the security code, and the transaction of funds happening in the background.
Technically work or work technically?
Depends on the software system driving the platform. There are many variants to the answer but I can give you a rough idea of how it works.
The mag stripe contains magnetically recorded account data. Just like credit and debit cards. There are different tracks of data, generally track1, 2, 3. Each has a standard message format layout and is sometimes dependent on the industry or geographical deployment. A lot of the gift cards are similar because their card programs are being driven by companies like Black Hawk and such.
A lot of closed loop gift card programs (non-bugged with Visa/MC/Amex logos) don't implement the security code. If it is a bugged card (visa, mc, amex, etc..) then the 3 digit code is just the standard CSC code. That number is generated with an algorithm when they generate the batch of card numbers and mount them into their platform.
Transaction of funds can run the gamut. I assume you already understand the transaction processing flows. I have seen systems where the balance of funds sit with the business/merchant and other systems where it sits with the processor. Generally, if the card can only be used at one business/merchant then the funds should stay with them and it sits as a liability on their books dependent on their Nation/State laws relative to gift cards and other forms of stored value. If it is a multi-merchant business (pooled or open loop) then usually the money sits with the card program or the processor and not the merchants. I have seen rare cases in pooled and open loop systems where the merchants individually retain the loaded funds and the processor does net-settlement between all participants at EOD. I find that last model a bit risky and it is like trying to create V/MC all over again.
As an experiment go buy a cheap USB mag stripe reader and swipe your credit, debit and gift cards directly into a text editor like notepad. The encoded data will be dumped in plain text for you to view.
If you want to have even more fun you can get your hands on a card encoder and you can write the mag stripe data from any of your cards onto blank white card stock. In fact, you can do this with many credit cards. I have done it dozens of times. It can be a particularly amusing and interesting social experiment to go shopping with a blank white credit card or a gift card. Sales clerks tend to get a bit flustered but when the authorization prints out there isn't much they can do. Occasionally I have been refused service and have to pull out the original card.
If you have any more questions, msg me. I wrote our gift card issuing/acquiring platform. Drives the standard issue plastic mag strip gift card applications and other derivatives.
Depends on the software system driving the platform. There are many variants to the answer but I can give you a rough idea of how it works.
The mag stripe contains magnetically recorded account data. Just like credit and debit cards. There are different tracks of data, generally track1, 2, 3. Each has a standard message format layout and is sometimes dependent on the industry or geographical deployment. A lot of the gift cards are similar because their card programs are being driven by companies like Black Hawk and such.
A lot of closed loop gift card programs (non-bugged with Visa/MC/Amex logos) don't implement the security code. If it is a bugged card (visa, mc, amex, etc..) then the 3 digit code is just the standard CSC code. That number is generated with an algorithm when they generate the batch of card numbers and mount them into their platform.
Transaction of funds can run the gamut. I assume you already understand the transaction processing flows. I have seen systems where the balance of funds sit with the business/merchant and other systems where it sits with the processor. Generally, if the card can only be used at one business/merchant then the funds should stay with them and it sits as a liability on their books dependent on their Nation/State laws relative to gift cards and other forms of stored value. If it is a multi-merchant business (pooled or open loop) then usually the money sits with the card program or the processor and not the merchants. I have seen rare cases in pooled and open loop systems where the merchants individually retain the loaded funds and the processor does net-settlement between all participants at EOD. I find that last model a bit risky and it is like trying to create V/MC all over again.
As an experiment go buy a cheap USB mag stripe reader and swipe your credit, debit and gift cards directly into a text editor like notepad. The encoded data will be dumped in plain text for you to view.
If you want to have even more fun you can get your hands on a card encoder and you can write the mag stripe data from any of your cards onto blank white card stock. In fact, you can do this with many credit cards. I have done it dozens of times. It can be a particularly amusing and interesting social experiment to go shopping with a blank white credit card or a gift card. Sales clerks tend to get a bit flustered but when the authorization prints out there isn't much they can do. Occasionally I have been refused service and have to pull out the original card.
If you have any more questions, msg me. I wrote our gift card issuing/acquiring platform. Drives the standard issue plastic mag strip gift card applications and other derivatives.
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