What happens when you make a PIN payment?

Millions of PIN transactions are made every day, and the number continues to rise. To handle this volume of traffic, system reliability is vital. But how, precisely does the system operate?

Actually, there isn’t a system as such. What we have is a series of interlinked connections, making up what we call the payment chain. Each link in this chain is important in completing a PIN transaction: from cash register to POS terminal, from POS terminal to data communication line, via this line to a transaction processor, then to the cardholder’s bank for authorisation and finally back to the merchant’s PIN POS terminal. And at the end of the day, a file is sent to the merchant’s bank and to the cardholder’s bank for processing of the transaction.

It is the connections between all these links that allow the transaction to be made, ensuring that the right amount is debited to the right account and credited to the right account. This process hardly ever goes wrong. After all, if we could not rely on the system, we would not make such extensive use of it.

System backup
The transaction processors’ computers and systems are important elements in the payment chain. These systems are so designed as to maximise the continuity and reliability of operations. Automatic fallback to standby computer centres, with duplicate and in some cases multiple systems, means that the probability of a PIN transaction failing is exceptionally small.

PIN card won’t work?
Despite the built-in reliability, it is still possible for a PIN transaction to fail. There are many reasons why this should happen, ranging from a simple problem like dirt on the magnetic stripe to failure of the data communication link, POS terminal malfunction or problems affecting the transaction processor. In short, anything which breaks any of the links in the chain can prevent PIN cards from being used.

The organisation with which you have a PIN contract (generally your bank) will be able to tell you what alternative processing options are available in the event of problems affecting PIN payments. Read more.

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