How Online Merchants Determine If Credit Card Numbers Are Valid

What are merchants?                A merchant is anyone who sells goods and services to someone. A merchant can be an individual or a company which is composed of a group of people developing their own products and services and sell it to the general public. These products and services sold by different merchants can be of any kind and purpose. As long as a product or a service is paid, the one selling it is called a merchant.

What are credit card numbers?
A credit card numbers that work is a unique series of numbers assigned to a credit card in order to make the credit cards different from one another. This is like the identity of the credit card itself. A credit card that works should have the proper format of a credit card number and with corresponding proper personal details of the cardholder

How does credit card validation work?
Before a purchase, is made by the cardholder, the merchant should first check if the credit card number provided by the cardholder is valid. This is how credit card validation works.

  • The cardholder provides necessary information to the merchant to purchase the needed product or service offered by the merchant.
  • The merchant then now uses a credit card software to relay the credit card information of the cardholder to the merchant’s bank.
  • The merchant’s bank receives the credit card information and processes the necessary transaction to the issuing bank of the cardholder. The bank network relays the information from the merchant’s bank to the issuing bank.
  • The issuing then receives the transaction details and checks whether the purchase made is valid or not. The issuing bank also checks if the credit is enough for the transaction to be completed. The issuing bank then now accepts or declines the transaction.
  • The cardholder receives the transaction details and settles the bill to the issuing bank.