This is a monthly column by CAA Board Member Dan Alvarez, addressing technology issues in the banking world, for non-tech professionals. 

#4 Anatomy of a Modern Credit Card 

     (January 2024)                                  

Happy New Year! Today, we’ll explore the physical technology behind one of the most common items found in 84 percent of American wallets: credit cards. In a later issue, and perhaps with the help of a fellow alumnus, we’d love to write about what happens behind the scenes when you swipe a credit card with payment processors, transaction processing, etc. If you’d like to contribute to a future article on this subject, please reach out to And as always, we’d love to get your feedback on this month’s article!
Let’s start with a high level overview of physical features on a credit card:


Over the last few years, the front face of credit cards have undergone some significant changes, mainly:
  1. The credit card number might have moved from the front to the back of the card.
  2. The signature hologram stickers have also largely moved to the back of the card.
  3. Now present on almost all credit cards are EMV chips, enabling contactless and more secure payments.
EMV chips, named after their original developers (Europay, MasterCard and Visa), are small, metallic squares seen on almost all modern credit and debit cards. They're a security feature designed to reduce fraud, particularly in card-present transactions (like at a physical store). EMV chips offer significantly better security when compared to the previously standard magnetic stripe on the back of the card. Here’s a breakdown of the difference between the two and why it matters:
  • Magnetic Strip: The magnetic strip contains a static (unchanging) set of Card Holder Details (CHD) and Sensitive Authentication Data (SAD). A transaction will fail if both sets of data can’t be read off the strip. Since this data is unchanging, it’s fairly easy to have it stolen by a bad actor, especially during a physical transaction where they can reuse the same data set to perform unauthorized transactions on your card.
  • EMV Chip: A small microprocessor embedded in the chip generates a unique, one-time code for each transaction when inserted into a chip card reader or tapped for a contactless payment. This is unlike the static data contained on a magnetic stripe. When you use your card at a terminal, the chip interacts with the merchant's point-of-sale system to create a transaction code that uniquely identifies that specific purchase. This code cannot be used again, making it extremely difficult for fraudsters to replicate or reuse your card details. Additionally, during the transaction, the chip and the issuing bank communicate to authenticate the transaction, ensuring that the card is valid and the person using it is authorized to do so. This dynamic process provides a robust layer of security that greatly reduces the risk of counterfeit and fraudulent transactions.
EMV chips are now the industry standard for credit and debit cards as the magnetic stripe slowly fades out.
There are some other interesting changes you may have noticed if you’ve received a new credit or debit card in the last one to two years: Many new cards do not come with embossed or raised printing on them anymore. The imprinting of credit cards at the point-of-sale dates back before the 1980s and was largely phased out in the early 2000s before the Internet access required for payment terminals was commonplace. For me, this brings up many memories of holiday shopping with my mom at Macy’s with the iconic ZipZap machines.


Chase Credit Card Technology

It should go without saying that Chase is one of the largest credit card issuers in the world, and they continue to innovate with new programs, perks and protections. JPMorgan also holds the patent for composite credit cards, which contain several layers of adhesive, plastic and metal but still manage to support magnetic strip, chip-insert and contactless payments. This is quite a feat considering metal often interferes with the radio-frequency communication required for near-field (contactless) payments! This composite construction also gives the cards a heavier weight, contributing to a more luxurious and premium feel. Some of Chase’s higher-end credit cards feature this technology, such as the Sapphire Reserve and Sapphire Preferred.

Bonus: Anatomy of a Card Number


The 16 digits on a credit card aren't just a random string of numbers. They are structured in a specific way to provide important information about the issuing bank and account holder, and even provide assurances against mistakes when copying the number itself. Here's what each part represents:
  • Major Industry Identifier (digit 1): This digit indicates the card network and industry. For example, Visa cards often start with a 4, and Mastercard with 5 and American Express with 3.
  • Bank Identification Number (digits 2-4): The rest of the IIN identifies the issuing bank or institution. This helps in routing the transaction to the correct bank.
  • Account Number (digits 5-16): These digits represent the individual account number. Each bank has its own system for assigning these numbers, but they must be unique to each cardholder with the issuer.
  • Check Digit (digit 16): This is used as a safety check to ensure the card number is valid. It's calculated through the Luhn algorithm, a simple checksum* formula used to validate a variety of identification numbers. [*checksum: a value that represents the number of bits in a transmission message and is used by IT professionals to detect high-level errors within data transmissions]
Together, these numbers ensure that each credit card issued is unique and can be validated through standardized systems. This structure helps in fraud prevention, easy identification of the issuing institution and secure processing of transactions.
Links for Prior CAA Tech Corner Columns






About Dan Alvarez


Dan Alvarez began at JPMorgan Chase in June 2016 as a summer technology analyst/ infrastructure engineer, and left in April 2022 as a Senior Software Engineer in Global Technology Infrastructure - Product Strategy and Site Reliability Engineering (SRE). Since May 2022, he has worked for Amazon Web Services as an Enterprise Solutions Architect.

     He is also an avid guest lecturer for the City University of New York and has given lectures on artificial intelligence, cloud computing and career progression. Dan also works closely with Amazon's Skills to Jobs team and the NY Tech Alliance with the goal of creating the most diverse, equitable and accessible tech ecosystem in the world.

     A graduate of Brooklyn College, he is listed as an Alumni Champion of the school and was named one of Brooklyn College's 30 Under 30. He lives in Bensonhurst, Brooklyn.