Many credit card users may not fully understand how their cards function. Recently, a software engineer working in a multinational corporation, with a keen interest in online shopping, shared insights on X (formerly Twitter) about credit card numbers. FinPal also posted on X, raising the question of how platforms like Amazon and Flipkart can quickly validate a credit card and identify applicable bank offers. According to FinPal, credit card numbers are not arbitrary; they are generated using a secret algorithm to enable efficient validation and banking processes.
The Luhn Algorithm is used by banks to validate the credit card numbers entered by users. FinPal detailed that the algorithm verifies whether the sum of all digits (after doubling every second digit) is divisible by 10. A divisible sum signifies a valid credit card number. Banks utilize the BIN (Bank Identification Number) system. The first 6 to 8 digits inform the portal about the card issuer, while the portal uses the BIN range to determine card-specific offers. The initial digit identifies the Major Industry Identifier (MII), revealing the card network, while the first 6-8 digits constitute the BIN (Bank Identification Number), which provides information about the bank and the type of card, such as Visa Infinite and a specific card like HDFC Infinia.