The last three digits of a credit card are often referred to as the "check digit" or "luhn check digit." This is a validation number used by credit card companies to ensure that the card number entered is valid and has not been mistyped. The check digit is calculated using a specific algorithm, which involves doubling every second digit from right to left, adding those digits together, and then taking the remainder when this sum is divided by 10. If the remainder is zero, the check digit is 0; otherwise, it is 10 minus the remainder.
The use of the luhn algorithm dates back to the early 1970s, when it was developed by Hans Peter Luhn, a computer scientist at IBM. It was designed to prevent errors in automated data entry systems, such as those used by banks and credit card companies. By including a check digit, these systems can quickly verify whether the card number is likely to be correct before processing the transaction.
Nowadays, the luhn algorithm is widely used not only for credit card numbers but also for other identification numbers, such as Social Security numbers, driver's license numbers, and even some types of product codes. It is an essential tool for ensuring the integrity of sensitive information and preventing fraudulent transactions.
When you receive a new credit card, the issuer will provide you with a unique card number. The first six digits usually represent the IIN (Issuer Identification Number), which tells you who issued the card (e.g., Visa, MasterCard, Discover). The next ten digits are the account number, which is unique to each cardholder. Finally, the last digit is the check digit, which helps validate the entire card number.
It's important to note that while the check digit is a useful tool for basic validation, it does not guarantee that the card number is genuine or that it corresponds to an active account. For example, someone could potentially create a fake card number that passes the luhn check. Therefore, additional security measures, such as CVV2 codes and expiration dates, are used in conjunction with the check digit to further protect against fraud.
In addition to its primary purpose of error detection, the luhn algorithm also plays a role in masking sensitive information. When a credit card number is displayed on a receipt or online, only the first six and last four digits are typically shown, with the middle eight digits replaced by asterisks or Xs. This practice, known as PCI compliance (Payment Card Industry Data Security Standard), helps to safeguard against unauthorized access to cardholder data.
Despite its importance, the luhn algorithm is not foolproof. There have been instances where fraudsters have found ways to generate valid card numbers that pass the check digit test. However, these cases are relatively rare and require advanced knowledge and resources. Nonetheless, the algorithm remains a valuable tool for basic validation and continues to be an essential part of secure payment processing systems worldwide.
In conclusion, the last three digits of a credit card, commonly known as the check digit or luhn check digit, play a crucial role in ensuring the validity of the card number. By following the luhn algorithm, card issuers can quickly verify that the card number entered is likely to be correct and reduce the likelihood of errors during transactions. While it is not a foolproof method of protection, the check digit is an essential component of modern payment systems and serves as a vital layer of security against fraud.