MasterCard, the US global payments and technology company, is preparing to remove the magnetic strip from all its debit and credit cards, with the advent of chip-based cards that will expire. Although this method has been in use for decades and by billions of people, the development of technology has led users to switch to secure chip-based cards. With chip cards, a user has to slot the card only into one reader or keep it on a single charge terminal, thus making the whole process easier. Chip cards offer greater security and real-time authentication, while making it easier for businesses to pay with cards.
Chip cards are powered by microprocessors and are therefore more efficient. Many of them are embedded with small antennas to process unconnected transactions. Also, the departure from MasterCard’s magnetic stripes changes consumer habits.
“Given the decline in payments made by magnetic lines after chip-based payments have taken place, the newly issued MasterCard credit and debit cards do not need to have a bar starting in 2024 in most markets,” MasterCard said in a statement. The company aims to remove magnetic lines from all credit and debit cards by 2033. He said the decade would allow its partners enough time to facilitate the transition to chip cards.
MasterCard said Europe would be the first region where its magnetic stripe cards would disappear. From 2027, banks in the United States will no longer be required to issue such cards. By 2029, new MasterCard credit and debit cards with magnetic stripes will no longer be issued.
It said it usually takes many years for payment processes to become ubiquitous. But digital transformation has accelerated during epidemics, which saw 1 billion unrelated transactions compared to the same period last year. In the second quarter of 2021, 45% of MasterCard’s personal checkouts were unrelated.