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TUCoPS :: Scams :: an37.txt

Electronic Funds Transfer Systems: Carding

                            Phile 1.3 of 1.14


As a respond from The Master Hacker we have written this g-phile
for those of you are either new or have no knowledge of carding.
This is a 5-part g-phile covering all areas of using a credit
card for carding.  Part 1 is mainly a explaintion of how credit
cards go through clearing houses and to the customers statement.


EFTS can broadly be described as computer data collection and relecommunication
techniques that electronically transport information about the movement of
funds between accounts managed by financial institutions.


With the adoption of the MICR (Magnetic Ink Character recognition) stand in
I Think about 1959, the banking industry took the first step toward
facilitating computerized handling of the growing number of checks used
in America.  By the 70's paper check processing had reached a level where
more than 37 billion individual pieces of paper moved through the banking
system annually.  In 1983 at the present rate of growth, it was anticipated
that this number would reach 55 billion.

Two general approaches are being follwoed in an effort to reduce the
burden of check processing:  the elimination of or supplant of check
transactions by electronic messages and the reduction of the physical
transport of paper.


Examples are the installation of automated teller machines (ATMs) by
financial institutions to provide on-line computerized banking
services, the development of automated clearinghouse services (such
as checkless payroll deposits) and telephone bill-paying services
which allow customers to enter bill paying information directly in
electronic form to a bank's computer through Touchtone telephones.

Automated teller machines are unattended computer terminal-type devices
that offer most of the services avaiable from a teller.  They
are actived by a customer through the combined use of a plastic card
with a magnetic strip bearing machine readable account
information, and a special secret number known only by the
customer (termed a PIN or personal Identification number).
Among the services offered through these machines are cash
withdrawls, transfers of fbalance inquiry.  Although early development of these machines
was restricted to providing off-line cash despensing, almost all
new ATM installations are on-line to the financial institution's
account database.

Automated clearinghouses (ACHs) are regional computer centers
fun for the most part by the federal reserve system and
concentrating thier activities on the processing of
pre-authorized electronic deposits or withdrawls from checking
accounts maintained by financial institutions.

Typical volume in the early 80's was over 11 million electronic
items per month submitted to the ACHs primarily on magnetic tape
for sorting and redistribution.  The predominant types of
electronic items processed by the 32 ACHs were military payroll
and social security electronic deposits.  Other types of
transactions include withdrawl of funds to pay bills
pre-authorized by the customer for payment.  Electronic deposits
or withdrawls destined for a F.I. not served by a specific
regional ACH are transmitted via telecommunications links to the
appropriate regional ACH for local redistribution.

Bill paying by telephone is another popular EFT service designed
to elimate paper check mailing and processing.  In its most
basic form, the service involves customer-direct input by a
touchtone telephone to a computer of the data necessaty to
generate electronic withdrawls from a account maintained by the
cusotmer and an electronic deposit to an account maintained by
the billing company.  Deposits destined for a company that does
not maintain an account with the customer's bank can be routed
through the local ACH for delivery to an appropriate bank.


Truncation of the physical transport of paper bearing
instructions for the movement of funds between accounts is
another EFT application.  For example, efforts to truncate the
flow of checks through the use of image processing techniques
are under development.  The thrust of this effort is to create
electronic images of checks at the point of first deposit and to
transmit only these images to the customer or customers's bank.

The national credit card clearing and settlement system are
other examples of such truncation systems.  When a customer uses
Visa or Mastercard to make a purchase, he or she normally is not
dealing with a merchant who has an account with the financial
institution that has issued the card.  As a result, the evidence
of the completed sale in the past was physically forwarded to
the merchant's contracting bank for credit to the merchant's
account and then on to the card-issuing banl for posting to the
customer's statement.  In 1978, national systems were installed
by the two competing bankcard organizations which truncated the
flow of this paper at the merchant's bank of deposit  and
forwared only an electronic message to the card issurer for
posting to the cardholders statement.  These systems were later
expanded to include worldwide bankcard sales.  The system that
supports this electronic transmission fpr Visa cards processes per month during the latter
part of 1985, or approximately 60% of all Visa card sales worldwide.
The Visa system transmits this sales data overnight in a form
which can be directly posted to a customer's descriptive billing
statement through a network linking together 250 Visa bank
processing centers in Europe, Canada, and the U.S.  Magnetic
tapes are sent to the balance of Visa banks operating in more
than 125 countries throughout the rest of the world.  
As a result of the implemention of these two systems, both
national systems have uniformly adopted cardholder billing
statements which simply list a description of the sale without
including a copy of the sales receipt.
telephone numbers and password format.  Gaining access to the
ACH will give to all the information about credit cards needed.
From Person names to expiration dates to issuing banks.  We hope
you have found this article intresting.

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