Hi Paul. I hope this expalnation helps.
MagnePrint is a dynamic card authentication technology based on the unique physical properties of the magnetic stripe, also referred to as the stripe's digital identifier or (DI). It provides validation that the card itself is genuine and that its encoded data has not been altered. The term itself is derived from 'Magne' as in magnetics, and 'Print' as in fingerprint.
Just as fingerprints can uniquely identify human beings, Magnetic Fingerprints (MagnePrint) can uniquely identify magstripe cards. This is possible because of the stripe composition. A magnetic stripe is created from billions of ferrous oxide particles. The particles are various shapes and sizes and are mixed in a random pattern when the magnetic slurry is prepared. They are sealed in place when the slurry dries, during the tape manufacturing process.
Once this occurs, the stationary particles emit a permanent, repeatable and distinctive magnetic signal, which is the MagnePrint. The MagnePrint, like a fingerprint, remains basically unchanged for the life of the card.
The MagnePrint is in the background of the stripe. It is sometimes referred to as 'noise'. It does not interfere with the cardholder personal data encoded in the foreground. Nor can the encoded data remove or erase the MagnePrint. Furthermore, the MagnePrint and the cardholder personal encoded data can be linked.
MagnePrint technology offers four layers of security. These are increasingly impregnable layers that act as barriers to prevent the compromise of MagnePrint technology.
The first layer is inherent in the complexity of the particulate distribution on a standard magnetic stripe. The MagnePrint algorithm leverages the fact that the 3.375 inches of stripe space along each card's encoding area are populated by a persistent random distribution of particles that are permanently fixed. Changes in the magnetic stripe's physical structure that occur during a card's lifetime, e.g., by abrasion during normal use, are statistically insignificant.
Furthermore, the likelihood that two different cards will yield identical particle distributions, given the randomness inherent in the process by which magnetic stripes are manufactured, is in the range of one in 900 million. And the hundreds of millions of particles make it statistically and practically impossible for an existing magnetic stripe to be cloned with a particle distribution pattern that will yield an equivalent MagnePrint value.
As a second layer, MagnePrint technology determines the 54-byte MagnePrint value in reference to the positions of the flux reversals of the encoded card data. The data pattern is larger, by orders of magnitude, than the particle pattern. Therefore, if a valid card with a known particle pattern were to be re-encoded with identical data, it would show non-trivial variances in the way the encoded data pattern microscopically aligns with the physically permanent particle structures of the magnetic stripe on the card. As a result, cards with altered data can be detected with MagnePrint technology.
The random variations inherent in each incidence of reading a card offer a third layer of security. Each read of a card, whether the card is swiped by hand, or inserted into a motorized or dip reader, is a stochastic process. Due to the principle of entropy and certain factors of imprecision such as swipe speed, pressure, direction, acceleration and reader to reader variations, the MagnePrint will change unpredictably with each swipe but within boundaries that allow it to be measured and validated.
Paradoxically, this means that a transaction MagnePrint value that is identical to a previous MagnePrint value on file is almost certainly fraudulent and will be rejected by the host. Multiple MagnePrint values taken from the same card on successive reads are expected to vary, within a statistical range. The probability of an exact match on all 54 bytes in separate card reads is in the range of one in 100 million. This inherent variability provides a statistically probable, unique transaction value for every card swipe, adding far greater security to the payment system and reducing the value of card data obtained through criminal cardholder database breaches.
Finally, as a fourth security level, the MagnePrint authorization process is protected against fraud by the simple fact that it depends on information that is in plain view. There is nothing hidden about the particulate structure of the card or the encoded alphanumeric data. This means that there is no 'secret' to the fundamental MagnePrint technology that, if cracked, would compromise the system.
Determining acceptance criteria: It is important to understand that MagnePrint does not guarantee the authenticity of the transaction. It provides the card acceptor or authorizer a data point representing the probability that a given card used for a transaction is authentic. By using this data point, a card acceptor or issuer can establish an acceptance criterion for a financially acceptable level of risk.