Mastercard is eliminating the utilization of magnetic straps on its credit and bank cards over subsequent decades, because the industry moves to safer or simpler alternatives like chips and tactile payments, the company has announced. It says it will be the first payment network to eliminate technology, which started in the 1960s.
Mastercard says the change will begin in 2024. The magnetic stripe will no longer be needed for new cards in regions such as Europe, where chip cards are already widely used. In the US, where the acceptance of chip payments has slowed, the change will begin in 2027. From 2029, no new Mastercard debits or credit cards will come with the magnetic field, and they will be completely gone by 2033.
Magnetic stripes on Mastercards were developed in the 1960s. Magnetic strips were much better than flatbed presses (aka “knuckle-busters”) used by money changers to record card details. But in the 1990s the standard EMV chip was introduced, which paved the way for cardholder information to be securely encrypted on small integrated circuit chips embedded in cards. These days, 86 percent of indoor card transactions use EMV chips. This is usually verified using a PIN, but biometric fingerprint authentication also appears to be the safest alternative.
Interestingly, the US did not accept EMV chips at the same rate as the rest of the country. Last year, the percentage of internal card transactions using technology in the country was about 73 percent lower, without efforts to promote acceptance. Historically the US has been ostracized for several reasons, including its size and low levels of fraud.
Although chip cards are classified as magnetic resonance imaging, Mastercard notes that communication payments, which can be made by card or digitally using many modern smartphones, have exploded in popularity during the epidemic. The number of offline transactions increased by 1 billion in the first quarter of this year compared to last year, it said. Worldwide, 45 percent of out-of-state employment in the second quarter of the year was unaffected.
Written by: Anabat
Reported by: Imaaz Nadeem