Chip-based Mastercard to replace magnetic stripe
No Mastercard credit and debit cards will have magnetic stripes by 2033 and the newly-issued cards will be required to have a stripe starting in 2024 in most markets.
Hyderabad: If you are one of those Mastercard users who still has a credit or debit card that has a magnetic stripe on the back, then you might have to move to a new card. If a recent statement by Mastercard is anything to go by, then the company is looking at phasing out the magnetic stripe and only focus on chip-based cards in the near future.
No Mastercard credit and debit cards will have magnetic stripes by 2033 and the newly-issued cards will be required to have a stripe starting in 2024 in most markets. By 2029, no new Mastercard credit or debit cards will be issued with a magnetic stripe.
“The shift away from the magnetic stripe points to both consumers changing habits for payments and the development of newer technologies. Today’s chips are powered by microprocessors that are much more capable and secure, and many are also embedded with tiny antennae that enable contactless transactions,” Mastercard said in a statement.
The magnetic stripe first arrived in the early 1960s with IBM largely credited for the innovation. The stripe allowed banks to encode card information onto magnetic tape laminated at the back. It paved the way for electronic payment terminals and chip cards, offering more security and real-time authorization while making it easier for businesses of all sizes to accept cards. That thin stripe has remained a fixture on billions of payment cards for decades, even as technology has evolved.
“But now the magnetic stripe is reaching its expiration date with Mastercard becoming the first payments network to phase it out,” the statement said. Biometric cards, which combine fingerprints with chips to verify a cardholder’s identity, offer another layer of security.
The magnetic stripe will start to disappear in 2024 from Mastercard payment cards in regions, such as Europe. Banks in the US will no longer be required to issue chip cards with a magnetic stripe, starting in 2027.
“It’s time to fully embrace these best-in-class capabilities, which ensure consumers can pay simply, swiftly and with peace of mind,” says Ajay Bhalla, president of Mastercard’s Cyber & Intelligence business.
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