Mastercard announced this week that it will be the first payments network to swipe left on magnetic stripes. The technology has been a staple of credit cards since its inception in the 1960s, but it is finally being replaced thanks to alternatives that provide higher levels of security.
As Mastercard explains in its article, the magnetic stripe is going away due to the ubiquity of EMV chip-based payments and contactless methods (e.g., digital wallets), which are now preferred by an overwhelming amount of users.
According to a recent survey, only 11 percent of Mastercard customers use the magnetic stripe. The company also noted that EMV chips are now used for 86 percent of face-to-face card transactions globally.
Mastercard will begin its process for removing magnetic stripes in 2024. Beginning that year, the payment giant’s credit and debit cards will no longer be required to utilize a stripe. That will be followed by U.S. banks not having to issue chip cards with a magnetic stripe starting in 2027.
Mastercard predicts that none of its credit and debit cards will have magnetic stripes by 2033.
In the 1960s, IBM saw the potential of coding information onto cards via magnetic tape. That technique was already being used for audio recordings and computer disk storage before it was brought to cards.
According to IBM lore, engineer Forrest Parry couldn’t figure out how to combine a strip of the tape to a plastic identity card for the CIA and mentioned it to his wife, who suggested using her flat iron to melt the strip to the badge. It wasn’t exactly the kind of hardware IBM would be celebrated for, but it worked.
Source: Mastercard