The magnetic strip will soon become a relic of the past. Mastercard will be the first payment provider to do away with the outdated system, announcing that it will start releasing debit and credit cards without the magnetic strip in 2024.
Those first cards will appear in Europe and other regions that have higher EMV card adoption rates. They will then make their way to the United States in 2027. The goal is to phase out magnetic strips entirely by 2033, after Mastercard ceases production of new magnetic strip cards in 2029.
The announcement marks the end of an era in the payments industry. The original magnetic strip debuted in the 1960s, giving banks a secure way to store payment information on the card itself. That made for a dramatic improvement over the old imprinting machines, which were difficult to use and far less secure than the magnetic alternative.
However, the magnetic strip was eventually outpaced by the EMV chip in the 1990s. EMV cards offer an even higher level of security, since the information on the chip can be protected with a PIN or (more recently) with a biometric fingerprint. They also support contactless payments, which are more convenient and more hygienic than a manual card swipe.
The news only solidifies a trend that is already in progress. The vast majority (86 percent) of in-person transactions are already completed with an EMV chip, though that number is slightly lower (73 percent) in the US, where consumers have been slower to make the switch.
“It’s time to fully embrace these best-in-class capabilities, which ensure consumers can pay simply, swiftly and with peace of mind,” said Mastercard Cyber and Intelligence Business President Ajay Bhalla. “What’s best for consumers is what’s best for everyone in the ecosystem.”
Mastercard has been tracking EMV adoption rates for the past several years, and has actively taken steps to accelerate that growth. The decision to get rid of the magnetic strip represents the culmination of those efforts, and indicates that the world is finally embracing more secure and more modern payment options.
Sources: CNET, Payments Journal
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