Mastercard to eliminate magnetic stripes on debit and credit cards starting 2024

By Sanjay Maurya

News Highlights

Mastercard has announced that magnetic strips in debit and credit cards would be phased out beginning in 2024, in favor of alternatives such as contactless and biometric cards.
It’s time to completely adopt these best-in-class capabilities said, Ajay Bhalla.
Rather than swiping the card in the POS terminal, biometric cards use the user’s fingerprints to authenticate transactions.

Mastercard to eliminate magnetic stripes on debit and credit cards starting 2024

Mastercard has announced that magnetic strips in debit and credit cards would be phased out beginning in 2024, in favor of alternatives such as contactless and biometric cards.

Magnetic stripes will be phased out first in places where chip cards are commonly used, such as Europe. According to Mastercard, banks in the US would no longer be allowed to supply chip cards with a magnetic strip starting in 2027.

It’s time to completely adopt these best-in-class capabilities, which ensure consumers can pay simply, quickly, and with peace of mind, said Ajay Bhalla, President of Mastercard’s Cyber & Intelligence business. What is good for the customers is good for everyone in the ecosystem.

By 2029, no new Mastercard credit or debit cards with magnetic stripes will be issued. Prepaid cards, on the other hand, are currently free from this change.

Magnetic cards, widely credited to IBM, were developed in the early 1960s, allowing banks to encode card information on magnetic tape laminated to the bank. This cleared the way for more secure electronic payment terminals and chip cards, as well as real-time authorization.

Chip-based payments have declined as a result of shifting customer payment patterns and the emergence of new technologies, according to the business.

Apple Inc.’s Apple Pay, which was incorporated with all iPhones starting with the iPhone 6 in 2014, is one example of a tech giant implementing contactless payments in its services.

Rather than swiping the card in the POS terminal, biometric cards use the user’s fingerprints to authenticate transactions.

Changes in payment systems typically take years, according to Mastercard, but the digital revolution has been accelerated due to the pandemic. When compared to the same period in 2020, Mastercard saw 1 billion more contactless transactions in the first quarter of 2021. Contactless transactions accounted for 45 percent of all in-person checkout transactions worldwide in the second quarter. Consumers are becoming more eager to try new payment methods, according to the company.