Mastercard is the first payment network that will do away with credit cards with magnetic stripes. Simply put, swiping a card to pay for anything will become a thing of the past.
Credit Cards may have graduated to having chips, NFC, and even biometric payment authentication systems in them. However, the majority of debit and credit cards still have the black magnetic stripe on the back. This will change, albeit very gradually.
Mastercard becomes the first payment facilitator to say no to credit cards with magnetic stripes:
Debit and credit cards have brought about a revolutionary change in the way commerce works. These humble sheets of plastic have allowed ordinary citizens to carry their bank account with them.
Payment cards, be it credit, debit, gift, or store discounts, have had the magnetic stripe. This shiny black stripe allows banks and financial institutions to encode cards, and consequentially, payment information onto magnetic tape. The stripe is laminated to the back of the card and is very durable.
— Channel 3 News (@wcax) August 22, 2021
Magnetic stripes opened up a new, quick, and hassle-free way to pay. Be it electronic payment terminals at a grocery store, pharmacy, restaurants, or hospitals, a simple debit or credit card was accepted everywhere, and it was all initially possible due to the magnetic stripe.
The thin, shiny, black, laminated stripe has steadfastly remained on the back of millions of credit and debit cards for decades. However, with the steady march of technology, even the magnetic stripe has received an expiration date, wrote Mastercard.
When will debit and credit cards no longer have magnetic stripes on their backside?
Mastercard claims the magnetic stripe is going away due to the ubiquity of EMV chip-based payments and contactless methods (e.g., digital wallets).
The payment facilitator claims only 11 percent of Mastercard customers, use the magnetic stripe. About 86 percent of the users prefer chip-n-pin or EMV technology.
— Tim Lord (@timlord) August 21, 2021
Simply put, consumers are quite comfortable with ‘contactless’ along with ‘cashless’ payment systems. Despite the rapid adoption of modern technologies, the magnetic stripe is not going away this year.
Mastercard will begin its process of removing magnetic stripes in 2024. In other words, the network’s credit and debit cards issued in 2024 and beyond, will not feature the magnetic stripe.
Mastercard is getting rid of the magnetic stripes on their credit cards. Mastercard has said with newer card technologies in wide use the mag stripe is "reaching its expiration date". #payments #credit #debit #magneticstripe #contactless
More info at – https://t.co/SYCYWzJbQW
— NetPay (@NetPayGroup) August 23, 2021
The majority of banks in the United States of America won’t have to issue chip cards with a magnetic stripe starting in 2027. Mastercard is confident that none of its credit and debit cards will have magnetic stripes by 2033.
Cashless payment systems have come a long way. There are technologies working today that do not even need a card for making a payment. However, it is not clear when the average consumer will be OK with ditching debit or credit cards completely, even though the transition has begun.