Service Code

What a service code is

A service code is a short numeric value stored in a payment card's magnetic-stripe data, after the expiration date. It gives a stripe-reading terminal information about how the issuer permits the card to be accepted. The issuer selects the value and encodes it on the card.

The field is described as three or four digits; Mastercard's network rules define a three-digit code. It is part of the card's track data, not a fee, authorization code or customer-entered security code.

A service code guides stripe-reading terminals, but it is not a fee and it cannot approve a transaction.

What the digits tell a stripe reader

In Mastercard's three-digit format, each position has a separate role. The first identifies a card category, including whether the card is international or has a chip application. The second indicates authorization conditions, and the third describes cardholder verification requirements, such as whether a PIN is required.

The terminal uses the code as one input when interpreting acceptance conditions for a magnetic-stripe transaction. For example, a PIN-related value signals a verification requirement. The code does not approve a sale by itself, and it does not replace the issuer's authorization decision.

How it relates to a chip card

A service code is associated with magnetic-stripe data, while an EMV chip transaction uses information from the chip. When a chip card is used at a hybrid terminal, the terminal must attempt a chip transaction if the applicable Mastercard service-code value indicates a chip is present.

A hybrid terminal must not reject or decline a transaction solely because of the magnetic-stripe service code. This distinction matters when a customer inserts a chip card instead of swiping it, or when the terminal handles a permitted fallback.

What it means for your costs

A service code does not create a separate processing fee, and it does not appear as a standard line item on your merchant statement. It also does not give you a rate to negotiate. Its practical effect is on how a stripe-reading terminal interprets card acceptance conditions.

The merchant concern is acceptance, not a direct fee. If a terminal handles chip and stripe data incorrectly, it can reject a valid payment or process the card through the wrong method. There is no service-code-specific charge to remove from your bill.

What you can actually change

You do not assign or change the service code, because the issuer encodes it on the card. You can make sure your terminal handles stripe data and chip transactions correctly.

• Keep terminals configured to attempt chip transactions when required, rather than relying on a stripe read.
• If a card is declined, note whether it was swiped, inserted or handled as fallback before troubleshooting the terminal.
• Do not alter or manually enter service-code values as a way to change authorization or processing costs.

1. 01
   Test chip acceptance. Run a test transaction with a chip card to confirm your terminal prompts for insertion and completes the chip read.
2. 02
   Record the entry method. When a card is declined, capture whether the transaction was swiped, inserted or processed through fallback.
3. 03
   Review terminal errors. Have your payment support team investigate repeated acceptance errors instead of changing card-track data.

Frequently asked questions