Digital card

The term digital card can refer to a physical item, such as a memory card on a camera, or, increasingly since 2017, to the digital content hosted
as a virtual card or cloud card, as a digital virtual representation of a physical card. They share a common purpose: identity management, credit card, debit card or driver's license. A non-physical digital card, unlike a magnetic stripe card, can emulate any kind of card.
A smartphone or smartwatch can store content from the card issuer; discount offers and news updates can be transmitted wirelessly, via Internet. These virtual cards are used in very high volumes by the mass transit sector, replacing paper-based tickets and the earlier magnetic strip cards.

History

Magnetic recording on steel tape and wire was invented by Valdemar Poulsen in Denmark around 1900 for recording audio. In the 1950s, magnetic recording of digital computer data on plastic tape coated with iron oxide was invented. In 1960, IBM built upon the magnetic tape idea and developed a reliable way of securing magnetic stripes to plastic cards, as part of a contract with the US government for a security system. A number of International Organization for Standardization standards, ISO/IEC 7810, ISO/IEC 7811, ISO/IEC 7812, ISO/IEC 7813, ISO 8583, and ISO/IEC 4909, now define the physical properties of such cards, including size, flexibility, location of the magstripe, magnetic characteristics, and data formats. Those standards also specify characteristics for financial cards, including the allocation of card number ranges to different card issuing institutions.
As technological progress emerged in the form of highly capable and always carried smartphones, handhelds and smartwatches, the term "digital card" was introduced.
On May 26, 2011 Google released its own version of a cloud hosted Google Wallet which contains digital cards - cards that can be created online without having to have a plastic card in first place, although all of its merchants currently issue both plastic and digital cards. There are several virtual card issuing companies located in different geographical regions, such as Weel in Australia and Privacy in the USA.

Magnetic stripe card

A magnetic stripe card is a type of card capable of storing data by storing it on magnetic material attached to a plastic card. A computer device can update the card's content. The magnetic stripe is read by swiping it past a magnetic reading head. Magnetic stripe cards are commonly used in credit cards, identity cards, and transportation tickets. They may also contain a radio frequency identification tag, a transponder device and/or a microchip mostly used for access control or electronic payment.

Magnetic storage

Magnetic storage was known from World War II and computer data storage in the 1950s.
In 1969 IBM engineer Forrest Parry had the idea of attaching a piece of magnetic tape, the predominant storage medium at the time, to a plastic card base. He tried it, but the result was unsatisfactory. Strips of tape warped easily, and the tape's function was negatively affected by adhesives he used to attach it to the card. After a frustrating day in the laboratory trying to find an adhesive that would hold the tape securely without affecting its function, he came home with several pieces of magnetic tape and several plastic cards. As he entered his home his wife Dorothea Parry was ironing clothing. When he explained the source of his frustration – inability to get the tape to "stick" to the plastic so that it would not come off, but without compromising its function – she suggested that he use the iron to melt the stripe on. He tried it and it worked. The heat of the iron was just high enough to bond the tape to the card.
Incremental improvements from 1969 through 1973 enabled developing and selling implementations of what became known as the Universal Product Code. This engineering effort resulted in IBM producing the first magnetic striped plastic credit and ID cards used by banks, insurance companies, hospitals and many others.
Initial customers included banks, insurance companies and hospitals, who provided IBM with raw plastic cards preprinted with their logos, along with a list of the contact information and data which was to be encoded and embossed on the cards. Manufacturing involved attaching the magnetic stripe to the preprinted plastic cards using the hot stamping process developed by IBM.

Further developments and encoding standards

IBM's development work, begun in 1969, but still needed more work. Steps required to convert the magnetic striped media into an industry acceptable device included:

Creating the international standards for stripe record content, including which information, in what format, and using which defining codes.
Field testing the proposed device and standards for market acceptance.
Developing the manufacturing steps needed to mass-produce the large number of cards required.
Modifying available equipment to enable it to issue and accept stripes and the data associated with them.

These steps were initially managed by Jerome Svigals of the Advanced Systems Division of IBM, Los Gatos, California, from 1966 to 1975.
In most magnetic stripe cards, the magnetic stripe is contained in a plastic-like film. The magnetic stripe is located from the edge of the card, and is wide. The magnetic stripe contains three tracks, each wide. Tracks one and three are typically recorded at 210 bits per inch, while track two typically has a recording density of 75 bits per inch. Each track can either contain 7-bit alphanumeric characters, or 5-bit numeric characters. Track 1 standards were created by the airlines industry. Track 2 standards were created by the banking industry. Track 3 standards were created by the thrift-savings industry.
Magstripes following these specifications can typically be read by most point-of-sale hardware, which are simply general-purpose computers that have been programmed to perform the required tasks. Examples of cards adhering to these standards include ATM cards, bank cards, gift cards, loyalty cards, driver's licenses, telephone cards, membership cards, electronic benefit transfer cards, and nearly any application in which monetary 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.
Magnetic stripe cloning can be detected by the implementation of magnetic card reader heads and firmware that can read a signature of magnetic noise permanently embedded in all magnetic stripes during the card production process. This signature can be used in conjunction with common two-factor authentication schemes utilized in ATM, debit/retail point-of-sale and prepaid card applications.
Some types of cards intentionally ignore the ISO standards regarding which kind of data is recorded in each track, and use their own data sequences instead; these include hotel key cards, most subway and bus cards, and some national prepaid calling cards in which the balance is stored and maintained directly on the stripe and not retrieved from a remote database.

Financial cards

There are up to three tracks on magnetic cards known as tracks 1, 2, and 3. Track 3 is virtually unused by the major worldwide networks, and often is not even physically present on the card by virtue of a narrower magnetic stripe. Point-of-sale card readers almost always read track 1, or track 2, and sometimes both, in case one track is unreadable. The minimum cardholder account information needed to complete a transaction is present on both tracks. Track 1 has a higher bit density, is the only track that may contain alphabetic text, and hence is the only track that contains the cardholder's name.
Track 1 is written with code known as DEC
SIXBIT plus odd parity. The information on track 1 on financial cards is contained in several formats: A, which is reserved for proprietary use of the card issuer, B, which is described below, C-M, which are reserved for use by ANSI Subcommittee X3B10 and N-Z, which are available for use by individual card issuers:

Track 1

Format B:

Start sentinel — one character
Format code="B" — one character
Primary account number — up to 19 characters. Usually, but not always, matches the credit card number printed on the front of the card.
Field Separator — one character
Name — 2 to 26 characters, surnames separated by space if necessary, Surname separator: /
Field Separator — one character
Expiration date — four characters in the form YYMM.
Service code — three characters
Discretionary data — may include Pin Verification Key Indicator, PIN Verification Value, Card Verification Value or Card Verification Code
End sentinel — one character
Longitudinal redundancy check — it is one character and a validity character calculated from other data on the track.
Track 2

This format was developed by the banking industry. This track is written with a 5-bit scheme, which allows for sixteen possible characters, which are the numbers 0–9, plus the six characters : ; < = > ? . The data format is as follows:

Start sentinel — one character
Primary account number — up to 19 characters. Usually, but not always, matches the credit card number printed on the front of the card.
Separator — one character
Expiration date — four characters in the form YYMM.
Service code — three digits. The first digit specifies the interchange rules, the second specifies authorization processing and the third specifies the range of services
Discretionary data — as in track one
End sentinel — one character
Longitudinal redundancy check — it is one character and a validity character calculated from other data on the track. Most reader devices do not make the LRC available for display, but use it to verify the input internally to the device.

Service code values common in financial cards:
First digit
Second digit
Third digit