To ensure the security of a credit card account and the safety of all consumers, credit card truncation is
This process refers to the removal of the expiration date and omission of all credit card numbers in electronically
printed receipts except the last four to five digits.
Credit card truncation was imposed by the Fair and Accurate Credit Transactions Act (FACTA) in
response to increasing cases of identity theft. According to this federal regulation, receipts including social
security, credit card, and debit card numbers may omit all but the last five digits of the credit card number or
its expiration date. For machines used prior to July 1, 2005, the government gave the merchant a maximum of three
years to comply. For those in use after January 1, 2005, the owner was given only one year to conform. This law
required all machines to support credit card truncation by July 1, 2008 and penalties for violators were severe.
Depending on the state, penalty fees may reach up to $10,000 per transaction and merchants may even face felony
charges. Worse, they may even be placed on the terminated merchant file, which bans them from accepting any type of
credit card in the future or see their life’s work go down the drain when their business is shut down.
According to FACTA, credit card truncation is only required on the customer’s copy of the credit card receipt since
merchants may need credit card numbers in case of problems. Moreover, credit card truncation only encompasses
electronically printed receipts and fails to include handwritten records and imprints.
Visa and MasterCard also imposed credit card truncation on all merchant machines effective July 1, 2003. According
to Visa, all credit card machines, whether new or old, should support credit card truncation by July 1, 2006. They
even charge penalty fees for violators ranging from $5,000 for the first violation to $500,000 per month depending
on the severity and frequency of the violation.
What merchants did to comply with this regulation was dispose of old machines that were not capable of credit
card truncation, reprogram the software they used to support truncation, and purchase credit card machines
that had the option for truncation. Visa and MasterCard provided a list of the machines that they no longer allowed
to print receipts. These included POS 50 and 500, Linkpoint 4000, and Verifone Zon Jr. and Jr. XL. Machines capable
of credit card truncation are available in merchant service providers and stores. It is advisable for all
business-starters to prioritize credit card truncation machines in their budget for equipment and supplies since
failing to adhere to this regulation is punishable by law.
Source: Credit Cards For People With Bad Credit Rating
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