If you have a credit card issued by Mastercard, you will get a replacement card in the next few years. The company says it is removing the magnetic stripe on the back of cards containing payment information.
For the last six years, that information has been transmitted from an embedded chip. Instead of swiping cards at payment terminals, consumers with chip-enabled cards have been inserting their cards instead.
The cards consumers now have in their wallets feature both the chip and the magnetic stripes. Mastercard says it’s finally time to eliminate the stripes, acknowledging that they can demagnetize or become damaged with extended use.
The stripes are also not as secure as the chips. Chip cards store their data on an actual computer chip embedded in the plastic.
The cards are placed in a card reader that reads the encrypted data. Some terminals also feature a contactless interface, with the machine reading the data from the chip just a few inches away.
Higher level of security
Credit card companies moved to the chips because they are more secure, especially at gas pumps. Thieves sometimes replace a pump’s card reader with a “skimmer” that captures data from the magnetic stripe when the card is swiped.
Before deciding to remove the stripe, Mastercard commissioned a poll of its credit card customers. It found that most don’t even think about the stripe on the back of their card.
Only 11% of customers thought it was a bad idea to remove the stripe. Ninety-two percent said removing the stripe would not affect their use of the card.
The magnetic stripe, developed by IBM, was introduced to credit cards in the early 1960s. Before that, clerks had to write out the customer’s information by hand.
The phase-out of the magnetic stripe will begin in 2024. Banks in the U.S. that issue credit cards will not have to provide a magnetic stripe starting in 2027.
Mastercard says it is already working on the next generation of credit cards that will be even more secure than the chip card. It says a biometrics card will one day combine fingerprints with chips to verify the customer’s identity.