In the early days of modern credit cards, a store clerk had to manually record account information for each card-paying customer.
Later, flatbed printing machines were used to write information from cards onto carbon paper packaging, and the sound of the sliding pen brought them the name of the zipper machines. (They were also called “bone breakers” because of the unfortunate people who ripped their fingers off the plate.)
And how could the clerks know if they should approve the buyer’s purchase? They couldn’t know.
Credit card companies distributed a monthly list of problem or expired account numbers, and the merchant had to compare customer cards to the list.
The advent of the magnetic stripe changed everything.
Magnetic Stripe, an early 1960s innovation largely attributed to IBM, allowed banks to encode card information onto a magnetic stripe laminated to the back.
Too paved the way for electronic payment terminals and chip cards that provided greater security and real-time authorization, making it easy for businesses of all sizes to accept cards.
This thin streak has remained entrenched in billions of payment cards for decades. even when technology has evolved.
But now the magnetic stripe’s expiration date is coming to an end, as Mastercard was the first payment network to remove it.
The abandonment of the magnetic stripe is associated with both changing consumer payment habits and the development of new technologies.
Today’s chip cards are equipped with much more powerful and secure microprocessors, and many have built-in small antennas to enable contactless transactions.
Biometric cards, which combine fingerprints with chips to verify the identity of the cardholder, offer another layer of security.
Due to the decrease in the number of payments from the magnetic stripe after the introduction of chip payments, The new Mastercard credit and debit cards will not have a magnetic stripe from 2024 in most countries.
In 2033, no Mastercard credit and debit cards will have a magnetic stripe. The rest of the partners who are still dependent on this technology have a long way to go to gradually implement chip card processing.
The first chip card debuted in France in the 1960s, but it took years to become popular.
And a serious problem arose: not all terminals had different chip cards.
This led to the development of a global standard for EMV chip technology.
Currently, the chip generates a unique code for each transaction that is verified by the issuing bank to ensure that an authentic card is being used.
This technology also enhances the security of cardholder data.
Since the late 1990s, with the introduction of the EMV standard, chip cards have become the preferred form of payment.
EMV chips are currently used in 86% of personal card transactions worldwide.
More than half of Americans prefer to use a chip card at a kiosk more than any other payment method, according to a December Mastercard study by the Phoenix Consumer Monitor, with security being the determining factor.
This is followed by contactless payments, payments by card or e-wallet.
Only 11% said they preferred to swipe the card through a reader, and that figure drops to 9% when you take into account cardholders with contactless payment experience.
In 2024, the magnetic stripe will begin to disappear from Mastercard payment cards in regions such as Europe, where chip cards are already widely used.
In the United States, banks will stop issuing chip and magnetic stripe cards from 2027.
“It’s time to take full advantage of these best-in-class capabilities to ensure consumers can pay easily, quickly and with peace of mind,” said Ajay Bhalla, President of Mastercard Cyber & Intelligence.