MasterCard has confirmed that the days of bank and credit cards carrying a magnetic strip on the back are numbered.
The financial services giant announced the move in a blog post, in which it said the world would soon be “swiping left on magnetic-stripes.”
It should be remembered that in the early days of credit cards, shop staff had to write down by hand the account information of each card in order to process a payment.
The world then transitioned to flatbed imprinting machines to record the card information on carbon paper packets.
But the problem with those methods (besides the skinned knuckles from imprinting machines) was that staff had to manually check whether the card was approved for the transaction, against a physical list of bad account numbers that would circulated once a month.
But the arrival of magnetic stripe in the 1960s changed all that.
This was because the magnetic stripe allowed banks to encode card information onto the magnetic tape laminated to the back of the card.
This innovation paved the way for electronic payment terminals and chip cards, offering more security and real-time authorisation while making it easier for businesses to accept cards.
The magnetic stripe still remains on almost all credit and debit cards, and has helped process countless transactions for decades.
Swiping cards with the magnetic stripe still remains in operation in parts of the United States and other parts of the globe, such as South Africa.
“But now the magnetic stripe is reaching its expiration date with Mastercard becoming the first payments network to phase it out,” noted the financial services firm.
It said payment habits have changed and this, coupled with the development of newer technologies, means change is needed.
It said that today’s cards are embedded with chips that are more secure and capable than previous options. More recent cards are embedded with tiny antennae that enable contactless transactions.
Biometric cards, which combine fingerprints with chips to verify a cardholder’s identity, are sometimes being deployed, and offer another layer of security.
But magnetic stripes are to phased out from 2024 and will disappear altogether by 2033 on MasterCard cards, because no new Mastercard credit or debit cards will be issued with a magnetic stripe from 2029.
“Based on the decline in payments powered by magnetic stripes after chip-based payments took hold, newly-issued Mastercard credit and debit cards will not be required to have a stripe starting in 2024 in most markets,” said the firm.
“By 2033, no Mastercard credit and debit cards will have magnetic stripes, which leaves a long runway for the remaining partners who still rely on the technology to phase in chip card processing.”
“It’s time to fully embrace these best-in-class capabilities, which ensure consumers can pay simply, swiftly and with peace of mind,” said Ajay Bhalla, president of Mastercard’s Cyber & Intelligence business. “What’s best for consumers is what’s best for everyone in the ecosystem.”
The UK has been using chip and pin payment systems since 2006, and in 2007 contactless tap and go cards were also introduced, but for smaller sums of money.
Samsung introduced its Samsung Pay system in the UK in 2016.
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