By Aisling Finn on Tuesday 17 August 2021
Over the next decade, Mastercard will stop issuing cards with magnetic strips.
Magnetic strips have been around since the early 1960s, but come 2024 Mastercard cards will no longer feature the once-innovative technology.
Mastercard is the first major card issuer to phase out magnetic strips on its cards and any new debit or credit cards issued after 2033 will not have the easily recognisable feature.
The magnetic strip will begin to disappear from cards in Europe from 2024, while banks in the US will no longer require the outdated payment method from 2027.
“It’s time to fully embrace these best-in-class capabilities, which ensure consumers can pay simply, swiftly and with peace of mind. What’s best for consumers is what’s best for everyone in the ecosystem,” Ajay Bhalla, president of Mastercard’s Cyber & Intelligence business, said.
By 2029, no new Mastercard credit or debit cards will be issued with a magnetic strip, while prepaid cards in Canada and the US are exempt from the change.
Today, cards with payment chips account for 86 per cent of face-to-face card transactions globally, with only 11 per cent of consumers saying they preferred to swipe in a recent survey by Mastercard.
“The merchant community looks forward to a day when requirements to support the magnetic stripe and the burden to protect data merchants really don’t need are eliminated,” John Drechny, CEO of the Merchant Advisory Group, which represents more than 165 U.S. merchants, added.
“We applaud Mastercard for taking this next step to help to strengthen payment security and protect merchants and consumers from risk. We’d like to see others in the industry move in this direction.”
In the first quarter of 2021, Mastercard saw one billion more contactless transactions than in the same period of 2020 and in the second quarter of 2021, 45 per cent of all in-person transactions globally were contactless.
According to the same study, 92 per cent of respondents would increase or keep usage of their cards the same if the magnetic strip was no longer a feature of their cards.
We’ve come a long way since the first plastic debit card was issued in 1959 and magnetic strips coming into fashion just a few years later are no longer the groundbreaking technology they once were.
Today, you’d be hard-pressed to find anyone that still uses the swipe method over chip and pin or contactless.