One of the biggest card issuers, Mastercard, announced that they are planning to change both credit and debit cards, as we know them. To be more specific, the company announced that they will be removing the magnetic stripe on all cards, being the first to leave this technology introduced in the 1960s behind.
A progressive rollout was already planned
Mastercard revealed that the newly issued cards won’t be required to have the magnetic stripe starting in 2023. Also, by the end of 2033, the technology will, most likely, be removed by all card issuers.
This decision “leaves a long runway for the remaining partners who still rely on the technology to phase in chip card processing,” an official statement issued by the company reads.
In the end, it’s a matter of security
One of the most important arguments in favor of magnetic stripe removal is that the magnetic tape itself isn’t the most secure material out there. Besides the fact that it’s not actually necessary nowadays when cards already come with embedded chips.
Mastercard claims that 86% of face-to-face card transactions are relying on this type of chip, while new technologies, like fingerprint verification, are being used increasingly often.
“It’s time to fully embrace these best-in-class capabilities, which ensure consumers can pay simply, swiftly, and with peace of mind,” says Ajay Bhalla, Mastercard’s president of cyber and intelligence business. “What’s best for consumers is what’s best for everyone in the ecosystem.”
Partner banks saluted Mastercard’s decision and it won’t be a big surprise if this will be the start of a new trend and most issuers will follow during the next few months. As a side note, contactless payments are currently growing at a steady rate, with over 1 billion more contactless transactions reported by Mastercard, compared to the same period in 2020. And the odds are in favor of an even bigger growth!