What Is the Luhn Algorithm?
The Luhn Algorithm—also known as the “Modulus 10 Algorithm”—is a formula that is used to determine whether the identification number provided by a user is accurate. The formula is widely used in validating credit card numbers, as well as other number sequences such as government Social Security Numbers (SSNs).
Today, the Luhn Algorithm is an essential component in the electronics payments system and is used by all major credit cards.
Key Takeaways
- The Luhn Algorithm is a mathematical formula developed in the late 1950s.
- It is widely used to validate the authenticity of identification numbers.
- In finance, it has helped increase electronic payments processing by rapidly identifying mis-entered credit card numbers.
How the Luhn Algorithm Works
The LUHN formula algorithm was developed by a German Computer Scientist named Hans Peter Luhn in 1954 while working as a researcher at IBM.The exact workings of the algorithm are based on modular arithmetic, a mathematical technique developed by Carl Friedrich Gauss in the early 19th century. Although its detailed workings are rather complex, it is best known for allowing computers to quickly assess whether the credit card numbers provided by customers are accurate.
The way it does so is by applying a series of computations to the credit card number given, adding up the results of those computations, and checking whether the resulting number matches the expected result. If it does, then the credit number is deemed valid. If not, the algorithm will reject the credit card number, indicating that the user made an error when inputting the number.
From a customer’s perspective, we use the Luhn Algorithm all the time, without even realizing it. When placing orders online or using a merchant’s point of sale (POS) terminal, computer systems are able to quickly tell when we have made a mistake inputting our information. This is because the Luhn Algorithm has been incorporated into those systems’ programming. Without it, we would need to wait until the entire purchase order is submitted before realizing whether the transaction was approved. The Luhn Algorithm, in other words, helps us quickly identify user errors and thereby speed up the pace of transactions.
Real-World Example of the Luhn Algorithm
One of the central concepts within the Luhn Algorithm is the use of so-called “check digits.” These digits consist of numbers that are inserted into the broader number sequence in order to help verify, or “check,” whether the whole number is authentic.
For credit cards, the check digit consists of a single digit printed at the end of the credit card number. Rather than being specifically chosen by the credit card company, the check digit is instead automatically determined by the Luhn Algorithm, based on the preceding numbers in the sequence. When users enter their credit card numbers to complete transactions, the payment processing software can use the Luhn Algorithm to detect whether the specified number is accurate, based in part on its check digit.
Today, the Luhn Algorithm is integrated into popular programming languages and code libraries, making it relatively easy to include Luhn-based identification number verification in new software applications.
FAQs
The Luhn Algorithm—also known as the “Modulus 10 Algorithm”—is a formula that is used to determine whether the identification number provided by a user is accurate. The formula is widely used in validating credit card numbers, as well as other number sequences such as government Social Security Numbers (SSNs).
What is the Luhn algorithm for credit card validation? ›
The Luhn algorithm works by summing up every other digit in the identification number, starting from the rightmost digit, and then doubling the value of every other digit and summing up the individual digits of the doubled values.
What is the algorithm for credit card validation? ›
Credit card numbers: The most common use of the Luhn algorithm is for verifying credit card numbers. Before a credit card transaction is processed, the card number can be checked using the Luhn algorithm to confirm that it's a valid sequence. This step helps detect accidental input errors or incomplete numbers.
Is the Luhn algorithm still used? ›
It is described in US patent 2950048A, granted on 23 August 1960. The algorithm is in the public domain and is in wide use today. It is specified in ISO/IEC 7812-1.
What are the limitations of Luhn algorithm? ›
Luhn algorithm limitations
Complex error detection: The algorithm is designed to catch common errors, such as single digits that have been entered incorrectly or adjacent digit transpositions (e.g. 67 becoming 76), but it does not detect more complex errors, such as non-adjacent digit swapping (e.g. 197 becoming 971).
Why does my credit card not pass Luhn check? ›
The message indicates the card number entered does not pass the industry wide algorithm used to verify if a credit card number is valid. The card may have been entered incorrectly or the card number may not be valid.
What is the verification process for credit card? ›
Verification of information: The bank will verify the information provided in the application, including your income, employment status, credit history and other details. Credit check: ICICI Bank will conduct a credit check to evaluate your credit score and credit history.
How to validate credit card CVV? ›
Card validation methods
Checking the three- or four-digit code on the back of the card is a straightforward and effective verification method. By asking customers for this code during checkout, businesses can make it more difficult for unauthorized individuals to complete a purchase using stolen card information.
How to determine the check digit of a credit card? ›
The check digit is calculated as follows: Beginning on the right with the digit which immediately precedes the check digit and moving toward the left, double every other digit. After doubling each selected digit, if the result is ten or greater, add the two digits together to arrive at a single-digit result.
How to identify credit card and debit card by number? ›
You can't tell whether a card is associated with a debit or credit account based on numbers alone. Still, you can usually find that out by looking at the card as most of them have a “credit” or “debit” label somewhere on the card.
Credit card companies, including American Express, Visa, Mastercard and Discover, use the Luhn algorithm. It does not verify any other information on a credit card, including whether the card's date is valid.
Does Visa use the Luhn algorithm? ›
The formula is widely used in validating credit card numbers, as well as other number sequences such as government Social Security Numbers (SSNs). Today, the Luhn Algorithm is an essential component in the electronics payments system and is used by all major credit cards.
What is the algorithm for validating credit card numbers? ›
The Luhn algorithm, also known as the "modulus 10" algorithm, is a simple checksum formula used to validate a variety of identification numbers, including credit card numbers. The algorithm works by summing up the digits of the number, starting from the rightmost digit and moving left.
What is mod 10 check for credit card? ›
The Luhn algorithm or Luhn formula, also known as the “modulus 10″ or “mod 10″ algorithm, is a simple checksum formula used to validate a variety of identification numbers, such as credit card numbers, IMEI numbers, National Provider Identifier numbers in US and Canadian Social Insurance Numbers.
Does Mastercard use Luhn algorithm? ›
Credit card companies, including American Express, Visa, Mastercard and Discover, use the Luhn algorithm. It does not verify any other information on a credit card, including whether the card's date is valid.
What is the algorithm of CVV? ›
The Visa CVV Generate verb calculates a 1-byte to 5-byte value through the DES-encryption of the PAN, the card expiration date, and the service code using two data-encrypting keys or two MAC keys.
