Mastercard recently announced they will completely phase out the magnetic stripe on all cards by 2033.
Payment technology has rapidly progressed over the past 60 years with magnetic card stripes evolving into EMV chips. Today, Near Field Contact (NFC) payments is quickly replacing EMV transactions.
Historically, it has taken the United States years to adapt to new payment technologies. The EMV chip is a perfect example: Introduced in 2011, EMV adaptation is still not complete in the US. But why?
The US economy is made up of millions of individual merchants and countless cards that must be updated with new technologies. Plus, the average American has four to five cards to their name. For large card issuers, setting up new technology and infrastructure is fairly manageable, but smaller banks and credit unions often struggle and have to delay.
An unprecedented global pandemic, however, has accelerated adaption to newer payment technologies at a rate never seen before. As consumers navigate the ever-changing landscape of purchasing every day essentials, they have increasingly turned to contactless payments options, either by card or through mobile apps.
With Mastercard’s historic decision of removing the magnetic stripes and the acceleration of contactless payments, there are so many other questions facing our industry. Will other card brands follow? What about those smaller banks and credit unions who don’t even offer EMV yet? How about all of those debit cards that still operate on magnetic stripes? Will this cause a revolution in gift cards which historically have been magnetic stripes only?
Only time will tell but one thing is for sure: It is time for the magnetic stripe that once revolutionized the payments industry to make way for newer and safer technologies.
Written By: Gina Smaili, Product Marketing Specialist
Majaski, C. (2021, August 26). Your Mastercard credit card is undergoing one of the biggest changes in years. Yahoo. https://finance.yahoo.com/news/why-mastercard-stripping-stripe-credit-213000374.html