Roland Perry wrote:
at 15:48:40 on Sat, 25 Feb 2012, Graham Nye remarked:

No, UK credit cards also have a magnetic stripe on the back, so they can
be swiped through a US retail terminal. You just have to sign on the
transaction, rather than use your PIN.

Only if, as above, the transaction is above the merchant's floor limit.
When using my UK credit card in the US I only needed to sign for some
transactions.

There's some over-simplification here. While I agree that some retailers
(especially high-margin ones like restaurants) may not require a
signature, there's a second floor limit above which they have to call
the credit card company. That limit seems to me to be much lower than
you'd get in the UK for a similar transaction verified by PIN.

Really? There's no concept of pre-authorizing the transaction, then
charging the customer the approved charge in two separate steps, both
performed at the retail terminal?

Jewelry stores don't call the credit card processor or bank if nothing
appears to be amiss. It's handled electronically.

The occasional machine, e.g. at gas stations, wanted to know my home
zip code (which, of course, I don't have) but I was able to pay in
the kiosk. (US gas stations need payment before dispensing fuel,
rather than afterwards, as in the UK.)

There's some over-generalisation here, it depends where you are in the
USA; some places need payment first, others don't. It depends a little
on the local demographic.

Actually, two gas stations at the same intersection can have different
policies.

In message , at 16:40:17 on Sat, 25 Feb
2012, Adam H. Kerman remarked:

No, UK credit cards also have a magnetic stripe on the back, so they can
be swiped through a US retail terminal. You just have to sign on the
transaction, rather than use your PIN.

Only if, as above, the transaction is above the merchant's floor limit.
When using my UK credit card in the US I only needed to sign for some
transactions.

There's some over-simplification here. While I agree that some retailers
(especially high-margin ones like restaurants) may not require a
signature, there's a second floor limit above which they have to call
the credit card company. That limit seems to me to be much lower than
you'd get in the UK for a similar transaction verified by PIN.

Really? There's no concept of pre-authorizing the transaction, then
charging the customer the approved charge in two separate steps, both
performed at the retail terminal?

No. I routinely spend amounts of the order of a thousand dollars at
retailers by Chip and PIN card, and it's a one-shot process.

The only time I've had a hiccup in the last few years was spending a
paltry $300 in a store in the USA, when they called the credit card
company, checked my ID, and then my CCC *still* phoned me in (what was
in USA) the middle of the night to ask if I recognised the transaction.

Jewelry stores don't call the credit card processor or bank if nothing
appears to be amiss. It's handled electronically.

The mechanism is that their terminal asks them to call, if the
transaction is flagged.

The occasional machine, e.g. at gas stations, wanted to know my home
zip code (which, of course, I don't have) but I was able to pay in
the kiosk. (US gas stations need payment before dispensing fuel,
rather than afterwards, as in the UK.)

There's some over-generalisation here, it depends where you are in the
USA; some places need payment first, others don't. It depends a little
on the local demographic.

Actually, two gas stations at the same intersection can have different
policies.

So it also depends a little on the retailer's internal policy (and also
their previous record for accepting fraudulent transactions, which might
in turn depend on their staff training programme), but common sense
tells us that already.
--
Roland Perry

Roland Perry wrote:
at 16:40:17 on Sat, 25 Feb 2012, Adam H. Kerman remarked:

No, UK credit cards also have a magnetic stripe on the back, so they can
be swiped through a US retail terminal. You just have to sign on the
transaction, rather than use your PIN.

Only if, as above, the transaction is above the merchant's floor limit.
When using my UK credit card in the US I only needed to sign for some
transactions.

There's some over-simplification here. While I agree that some retailers
(especially high-margin ones like restaurants) may not require a
signature, there's a second floor limit above which they have to call
the credit card company. That limit seems to me to be much lower than
you'd get in the UK for a similar transaction verified by PIN.

Really? There's no concept of pre-authorizing the transaction, then
charging the customer the approved charge in two separate steps, both
performed at the retail terminal?

No. I routinely spend amounts of the order of a thousand dollars at
retailers by Chip and PIN card, and it's a one-shot process.

If that's true, then I suspect your credit limit is stored on the card.

In a typical transaction in the US, the customer or cashier swipes the
card at the terminal (which one does it depends on the layout). Data is
exchanged with the credit card processor's server. Data sent back to
the merchant's terminal is the account credit limit (not disclosed to
the cashier unless there is a situation with a high-value purchase like
jewelry) and authorization code. The authorization code is critical,
which is why merchants cooperate in pre-authorizing sales. If a merchant
submits a transaction that wasn't pre-authorized and the bill isn't paid,
the merchant's account is charged back.

During authorization, there is a temporary freeze put on the cardholder's
credit limit in some fixed block amount, such as rounding up to the next
$100. This block must exceed the actual purchase amount.

When the total sale is known and taxes calculated, this amount is sent
to the credit card processor. The merchant then receives back a transaction
ID number, which may be printed on the receipt. The cardholder sees this
number on the monthly statement.

The credit limit freeze stays on the cardholder's account till the sale
has been posted to his account. This could happen immediately, but it
may not happen until the merchant submits his accounts that night, and
might be delayed a couple of days if more than one card processor is
involved.

Now, the authorization and transaction ID steps can occur closer together
if the total sale amount is sent with the credit card account number,
but the retailer receives the data back in two steps. It just depends
how fully integrated the card terminal is into the cash register.
Retail stores tend to have more sophisticated terminals than, say,
restaurants do. At a restaurant, the food and drinks bill may be calculated
on one system (or by hand in plenty of places), the cash register is not
integrated into the food ordering system the kitchen sees if they aren't
still going by hand-written tickets, and the card terminal is separate
still. In that case, the cashier rings up the purchase, gets a total,
swipes the credit card, waits to receive authorization, then enters the
total again into the card terminal, then receives the transaction ID back
which prints on the credit card slip the customer signs. Some restaurants
can enter the total into the card terminal at the time the card is swiped,
but they ask the customer to add the tip before entering the total.

Fast food restaurants have extremely sophisticated and well integrated
systems, using one system to take the order and relay the order to the
kitchen and handle the sale, including the credit card transaction.

In any of these setups, from the customer's perspective, the card is
swiped just the one time (unless there is a failure to obtain authorization),
but the authorization and transaction are two separate steps, perhaps
with a noticeable delay between the two.

Jewelry stores don't call the credit card processor or bank if nothing
appears to be amiss. It's handled electronically.

The mechanism is that their terminal asks them to call, if the
transaction is flagged.

Yeah, hoping and praying that they are dealing with mere con artists
committing a burglary and that the situation won't deteriorate into
a robbery.

The occasional machine, e.g. at gas stations, wanted to know my home
zip code (which, of course, I don't have) but I was able to pay in
the kiosk. (US gas stations need payment before dispensing fuel,
rather than afterwards, as in the UK.)

There's some over-generalisation here, it depends where you are in the
USA; some places need payment first, others don't. It depends a little
on the local demographic.

Actually, two gas stations at the same intersection can have different
policies.

So it also depends a little on the retailer's internal policy (and also
their previous record for accepting fraudulent transactions, which might
in turn depend on their staff training programme), but common sense
tells us that already.

It may depend on past history of theft, but as I commented on in the
other message, it may depend more upon assuming that the driver is
traveling a great distance and this won't be a repeat customer, with
a hint of prejudice against strangers from out of town being more likely
to be thieves than locals are.

Of course some merchants assume everyone is a thief, no matter how
regularly he shops there.

On 25-Feb-12 11:30, Adam H. Kerman wrote:
Roland Perry wrote:
at 16:40:17 on Sat, 25 Feb 2012, Adam H. Kerman remarked:
Really? There's no concept of pre-authorizing the transaction, then
charging the customer the approved charge in two separate steps, both
performed at the retail terminal?

No. I routinely spend amounts of the order of a thousand dollars at
retailers by Chip and PIN card, and it's a one-shot process.

If that's true, then I suspect your credit limit is stored on the card.

In a typical transaction in the US, the customer or cashier swipes the
card at the terminal (which one does it depends on the layout). Data is
exchanged with the credit card processor's server. Data sent back to
the merchant's terminal is the account credit limit (not disclosed to
the cashier unless there is a situation with a high-value purchase like
jewelry) and authorization code.

Really? I've never heard of card processors telling merchants what the
credit limit (or available credit, which is what I suspect you meant) on
a card is, just whether the authorization attempt succeeded.

Note that an authorization is for a particular amount of money, so there
is no _need_ for the merchant to know how much credit is available in
excess of that.

The authorization code is critical,
which is why merchants cooperate in pre-authorizing sales. If a merchant
submits a transaction that wasn't pre-authorized and the bill isn't paid,
the merchant's account is charged back.

That's not how it works. Authorization is confirmation from the card
issuers that a charge for the specified amount (or less) can be posted
successfully.

It has no effect on chargebacks; a customer can dispute posted charges
whether or not they were authorized first.

It also has nothing to do with whether the bill is paid, which is
entirely a matter between the card issuer and the customer.

During authorization, there is a temporary freeze put on the cardholder's
credit limit in some fixed block amount, such as rounding up to the next
$100. This block must exceed the actual purchase amount.

Perhaps your issuer does that, but every card I've had puts a "hold" on
the exact amount the merchant requested authorization for.

Some merchants, eg. restaurants and bars, will authorize more than the
total assuming you'll make additional purchases and/or add a tip, which
gets corrected when the final charge is posted. I've never seen any
other type of merchant do that.

Gas stations usually authorize for $1 and then (try to) post the full
amount. Technically this is risky for them, as the posting may be
denied if the card doesn't have enough credit available at the time, but
apparently the common risk is closed/over-limit cards.

S

--
Stephen Sprunk "God does not play dice." --Albert Einstein
CCIE #3723 "God is an inveterate gambler, and He throws the
K5SSS dice at every possible opportunity." --Stephen Hawking

Stephen Sprunk wrote:
On 25-Feb-12 11:30, Adam H. Kerman wrote:
Roland Perry wrote:
at 16:40:17 on Sat, 25 Feb 2012, Adam H. Kerman remarked:

Really? There's no concept of pre-authorizing the transaction, then
charging the customer the approved charge in two separate steps, both
performed at the retail terminal?

No. I routinely spend amounts of the order of a thousand dollars at
retailers by Chip and PIN card, and it's a one-shot process.

If that's true, then I suspect your credit limit is stored on the card.

In a typical transaction in the US, the customer or cashier swipes the
card at the terminal (which one does it depends on the layout). Data is
exchanged with the credit card processor's server. Data sent back to
the merchant's terminal is the account credit limit (not disclosed to
the cashier unless there is a situation with a high-value purchase like
jewelry) and authorization code.

Really? I've never heard of card processors telling merchants what the
credit limit (or available credit, which is what I suspect you meant) on
a card is, just whether the authorization attempt succeeded.

No, I don't mean available credit nor total credit, neither of which
are the merchant's business. I mean an amount frozen to be used for
that particular transaction, that isn't available for other transactions,
until cleared.

Note that an authorization is for a particular amount of money, so there
is no _need_ for the merchant to know how much credit is available in
excess of that.

The amount held for the transaction is somewhat higher than the amount
charged because it's rounded up.

The authorization code is critical, which is why merchants cooperate
in pre-authorizing sales. If a merchant submits a transaction that
wasn't pre-authorized and the bill isn't paid, the merchant's account
is charged back.

That's not how it works. Authorization is confirmation from the card
issuers that a charge for the specified amount (or less) can be posted
successfully.

I have no idea what distinction you are making, and neither do you.

It has no effect on chargebacks; a customer can dispute posted charges
whether or not they were authorized first.

I made no comment about customer disputes. If the bill isn't paid because
it's legitimate or because it's illegitimate (stolen card, identity theft),
the merchant's account is charged back.

It also has nothing to do with whether the bill is paid, which is
entirely a matter between the card issuer and the customer.

Bull****. If the transaction wasn't authorized, and the bill isn't
paid, the merchant is out the money. That's why they have the card
terminals to obtain authorization, duh, and they don't use the
impression machines to make old fashioned charge slips.

During authorization, there is a temporary freeze put on the cardholder's
credit limit in some fixed block amount, such as rounding up to the next
$100. This block must exceed the actual purchase amount.

Perhaps your issuer does that, but every card I've had puts a "hold" on
the exact amount the merchant requested authorization for.

Not between the time the authorization is requested and the transaction
ID number is issued, it's not, and sometimes, the higher amount doesn't
clear for a couple of days. It got to be a problem at gas stations.

Gas stations usually authorize for $1 and then (try to) post the full
amount.

Not true. The amount might be $75, depending on if it's Visa or MC.
Sometimes gas stations have signs up telling purchasers that if the tank
purchase exceeds that amount, the purchaser has to break up the purchase
into two transactions. The credit card clearing houses know when cards
are used at gas pumps for this reason.

In message , at 17:30:39 on Sat, 25 Feb
2012, Adam H. Kerman remarked:
I routinely spend amounts of the order of a thousand dollars at
retailers by Chip and PIN card, and it's a one-shot process.

If that's true, then I suspect your credit limit is stored on the card.

It isn't. What you have to accept is that things are done differently in
USA vs the rest of the world.

--
Roland Perry

Roland Perry wrote:
at 17:30:39 on Sat, 25 Feb 2012, Adam H. Kerman remarked:

I routinely spend amounts of the order of a thousand dollars at
retailers by Chip and PIN card, and it's a one-shot process.

If that's true, then I suspect your credit limit is stored on the card.

It isn't. What you have to accept is that things are done differently in
USA vs the rest of the world.

No, I don't believe that your purchases aren't getting authorizations, sorry.
The account has to be verified as active and that your available credit
is sufficient for the transaction. It's basic fraud fighting.

In message , at 23:36:53 on Sat, 25 Feb
2012, Adam H. Kerman remarked:
I routinely spend amounts of the order of a thousand dollars at
retailers by Chip and PIN card, and it's a one-shot process.

If that's true, then I suspect your credit limit is stored on the card.

It isn't. What you have to accept is that things are done differently in
USA vs the rest of the world.

No, I don't believe that your purchases aren't getting authorizations, sorry.
The account has to be verified as active and that your available credit
is sufficient for the transaction. It's basic fraud fighting.

They are getting authorised, but by C&P, not by the "two step process"
you were speculating about.
--
Roland Perry

Roland Perry wrote:
at 23:36:53 on Sat, 25 Feb 2012, Adam H. Kerman remarked:

I routinely spend amounts of the order of a thousand dollars at
retailers by Chip and PIN card, and it's a one-shot process.

If that's true, then I suspect your credit limit is stored on the card.

It isn't. What you have to accept is that things are done differently in
USA vs the rest of the world.

No, I don't believe that your purchases aren't getting authorizations, sorry.
The account has to be verified as active and that your available credit
is sufficient for the transaction. It's basic fraud fighting.

They are getting authorised, but by C&P, not by the "two step process"
you were speculating about.

Which has nothing to do with checking to see if the account holder has
exceeded his available credit, which you told us is not maintained on
the card. You're missing a step.

On 25-Feb-12 15:46, Roland Perry wrote:
In message , at 17:30:39 on Sat, 25 Feb
2012, Adam H. Kerman remarked:
I routinely spend amounts of the order of a thousand dollars at
retailers by Chip and PIN card, and it's a one-shot process.

If that's true, then I suspect your credit limit is stored on the card.

It isn't. What you have to accept is that things are done differently in
USA vs the rest of the world.

Aside from our lack of EMV, things aren't done differently in the US;
don't take Adam's misunderstandings as authoritative.

S

--
Stephen Sprunk "God does not play dice." --Albert Einstein
CCIE #3723 "God is an inveterate gambler, and He throws the
K5SSS dice at every possible opportunity." --Stephen Hawking