Mastercard Will Stop Issuing Cards with A Magnetic Strip after 2023

Contactless Payment Limit to Be Increased to More Than $100 Later In 2021

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MasterCard is soon going to stop issuing magnetic strip on cards. By the year 2033, none of the credit or debit cards that are issued by MasterCard would have a magnetic strip on them. Meanwhile, many of the banks in various regions, including the European region, is making attempts to issue without any magnetic strip on cards from the upcoming year of 2024.

The United Kingdom has moved towards a chip-to-pin payment option for all cards since 2006, but in the United States, there are still some banks that are offering magnetic strip on cards, and they are still in use all across the country.

According to MasterCard, the chip-to-pin feature, along with the consumption of newly established biometric cards that utilizes the user’s fingerprints, is likely to offer more security than before. The firm has also claimed that they are to become the initial network of payments to phase out this type of innovative technology for their consumers in place of the previously used magnetic strip on cards.

A spokesperson reported that the chip-to-pin global acceptance level has been in such a great amount that the current timing is right to initiate the phasing out process of the magnetic strip on cards, as they are not offering the required amount of security measures in this day and age. The phase-out process is likely to be very slow, which is termed as a long runway by the firm, as the firms are to gradually accept payments options for chip-to-pin.

Magnetic strip identity cards

The placement of magnetic strip on cards started in the previous century during the 1960s and was developed as a project by IBM to form identity cards for the staff working for the CIA.

One of the engineers who worked on this project, Forrest Parry, at that time had the idea of placing coded information on a strip made out of magnetic tape on a card made out of plastic material but was facing the struggle to join both ideas together to make a single item.

His wife, Dorothea Parry, was struck with an idea to use gradual application of heat to connect the card with the tape, beginning with the iron, which she was using at that time as it was the only thing accessible. This led to the formation of the first magnetic strip on card.

But due to the onset of the coronavirus pandemic, the firm stated that it has further highlighted the need for different methods of payment options and move on from the magnetic strips on card, progressively entrusting paying using Parry’s invention to the past records.

The method of contactless payment, which can easily be done by using both smartphone and card, has increased by more than a billion in the first four months of the year 2021 as compared to the same period of the year in the previous year.

As various experiments are ongoing regarding the payment system utilizing biometrics, to systems that would enable the user to make payments by using palm scanning and facial recognition and is likely to gradually leave behind payments with magnetic strip on cards.

Cash is card amid pandemic

Before the start of the coronavirus pandemic, consumers tend to put some amount of cash along with their cards in their pockets while going out in case they have to pay, due as the nationwide lockdown restrictions have been implemented, the number of payments that are being made with card has reduced for the first time in the past six years. Eight out of ten payments that are generally being made worldwide by the customers have become spontaneous, although the options have become limited due to the onset of the COVID-19 crisis.

The total amount of payments has reduced since the start of the COVID-19 pandemic, although when people tend to pay, they increasingly opted for contactless payment options to prevent further transmission of the deadly viral infection.

Increasing concerns regarding the coronavirus infection meant that shopping individuals were further encouraged to opt for these methods instead of handling cash.

The contactless payment technology allows the users to place their credit and debit cards, or their smartphone device, near the terminal of the trader to pay for the items they have bought, without requiring to enter the four-digit pin code for transaction confirmation. This possibility is likely to increase and would gradually remove the magnetic strip on cards for payments.

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