Mastercard has announced that it would phase out magnetic strips in debit and credit cards beginning in 2024, instead of focusing on alternatives such as contactless and biometric cards.
“Based on the reduction in payments enabled by magnetic stripes since the adoption of chip-based payments, newly issued Mastercard credit and debit cards will not be required to have a stripe beginning in most markets in 2024,” the firm said in a statement. Magnetic cards, primarily ascribed to IBM, were developed in the early 1960s, allowing banks to encode card information on magnetic tape bonded to the bank. This cleared the door for electronic payment terminals and chip cards, which provided greater security and real-time authorization.
However, shifting payment patterns and the introduction of newer technologies have resulted in a drop in chip-based payments, according to the business.
The decision comes as contactless cards and biometric cards gain popularity due to their global interoperability and security. Contactless cards employ near-field communication (NFC) or radio-frequency identification (RFID), which allows consumers to just wave the card near a point-of-sale (POS) terminal to make a purchase.
Instead of swiping the card in the POS terminal, biometric cards use the user’s fingerprints to authenticate transactions.