Mastercard, the American global payments and technology company, is preparing to phase out the magnetic strip from all its debit and credit cards, dumping the payment method of swiping as it gets obsolete with the emergence of chip-based cards. Though this method has remained in use for decades and by billions of people, the development of technology has led users to shift towards safer chip-based cards. With chip cards, a user only has to slot the card inside a reader or simply hold it over a payment terminal, making the entire process easy. The chip cards offer more security and real-time authorisation while making it easier for businesses to accept payments through cards.
The chip cards are powered by microprocessors and hence are more capable. Many of them are embedded with tiny antennae to enable contactless transactions. Also, Mastercard’s move away from magnetic strips points to changing consumer habits.
“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,” Mastercard said in a statement. The company aims to remove magnetic stripes from all credit and debit cards by 2033. It said the decade-long period will allow its partners ample time to make the transition to chip cards smooth.
Mastercard said Europe will be the first region from where its magnetic stripe cards will begin to disappear. From 2027 onwards, banks in the US will not have to issue such cards. By 2029, no new Mastercard credit and debit cards will be issued with magnetic stripes.
It said usually payment processes take years to become ubiquitous. But the digital transformation has accelerated during the pandemic, it said, adding that it saw 1 billion more contactless transactions compared to the same period last year. During the second quarter of 2021, 45 percent of Mastercard’s in-person checkouts were contactless.