Mastercard signals end of magnetic stripe on credit cards

Posted:
in General Discussion
Mastercard plans to phase out magnetic strips on credit and debit cards by 2033 due to the rise of other payment technologies, something that could change the appearance of the physical Apple Card.




The thin magnetic stripe on the back of a credit card is a staple of its design, with it being used since 1960 to handle payments at merchants around the world. However, changes in consumer payment habits has Mastercard considering the demise of the magnetic stripe.

From 2024, newly-issued Mastercard credit and debit cards will not be required to have the stripe at all in most markets, the payment network processor advises. By 2033, there won't be a Mastercard credit or debit card with a magnetic stripe at all.

As Apple Card uses Mastercard as its payment network for the physical card, it's possible that Apple could be among the earliest to remove the stripe, in favor of a cleaner appearance for the already-minimalist card.

The company cites the shift in consumer payments away from the stripe in favor of chip-based purchases and contactless payments, such as mobile payment systems like Apple Pay, as being behind the change.

An example of a credit card design without the magnetic stripe [via Mastercard]
An example of a credit card design without the magnetic stripe [via Mastercard]


In a December survey, more than half of Americans prefer using a chip card payment at a terminal rather than any other payment system, followed by contactless payments. Only 11% said they preferred to swipe their card, a figure that dropped to 9% for those with experience using contactless payments.

Another survey in July determined 81% of American cardholders would be comfortable with using a credit or debit card without the stripe, and then 92% would increase or keep using their cards if the stripe disappeared.

Mastercard's timeframe for the changes sees the stripe's disappearance starting 2024, with markets like Europe with high chip usage being the prime candidates. Banks in the United States won't be required to issue chip cards with a magnetic stripe from 2027.

No new Mastercard credit or debit cards will be issued with a magnetic stripe by 2029, the company reckons The exception would be prepaid cards in the U.S. and Canada which would continue to use the stripe for a while longer.

Read on AppleInsider
«1

Comments

  • Reply 1 of 31
    I like to see the removal of the stripe happen faster. I heavily favor retailers that accept contactless payments so I can simply use my watch. I rarely have to use my physical card, but it still happens. If all card issuers drop the stripe that will help to accelerate the adoption of terminals that accept contactless payments. That's all good as far as I'm concerned.
    juanguapoGeorgeBMacwatto_cobra
  • Reply 2 of 31
    dewmedewme Posts: 3,946member
    The headline gave me pause - but then I saw 2033 in the first line of the article along with the phase-out schedule. Should not be a big deal for round earth dwellers.
    GeorgeBMacwatto_cobra
  • Reply 3 of 31
    dewme said:
    The headline gave me pause - but then I saw 2033 in the first line of the article along with the phase-out schedule. Should not be a big deal for round earth dwellers.
    Even 5 years seems like it much too slow of a rate, to me. They need 12 to do it?!
    williamlondonkingofsomewherehotGeorgeBMacwatto_cobra
  • Reply 4 of 31
    mknelsonmknelson Posts: 864member
    I like to see the removal of the stripe happen faster. I heavily favor retailers that accept contactless payments so I can simply use my watch. I rarely have to use my physical card, but it still happens. If all card issuers drop the stripe that will help to accelerate the adoption of terminals that accept contactless payments. That's all good as far as I'm concerned.
    And chip and pin for larger purchases.
    tokyojimu
  • Reply 5 of 31
    dewme said:
    The headline gave me pause - but then I saw 2033 in the first line of the article along with the phase-out schedule. Should not be a big deal for round earth dwellers.
    Even 5 years seems like it much too slow of a rate, to me. They need 12 to do it?!
    Yes because many of the retailers during the pandemic never cleaned the port where you inserted the chip end, which would make the reader give a “chip malfunction” error and make you swipe. The Kroger owned grocery stores were notorious for this. That plus not taking anything besides their own proprietary contactless payment system is what’s causing the delay. 

    I’ve run across retailers who have a contactless terminal, but will not activate it, so it’s still chip or swipe for them. 
    watto_cobra
  • Reply 6 of 31
    MplsPMplsP Posts: 3,437member
    dewme said:
    The headline gave me pause - but then I saw 2033 in the first line of the article along with the phase-out schedule. Should not be a big deal for round earth dwellers.
    Even 5 years seems like it much too slow of a rate, to me. They need 12 to do it?!
    Well, since the magnetic stripe has been entrenched for over 60 years there’s a large base of installed hardware. One of the biggest is ATMs - the majority of them still seem to use magnetic stripes. Keep in mind this is worldwide, too.
    mike1williamlondon
  • Reply 7 of 31
    dewmedewme Posts: 3,946member
    dewme said:
    The headline gave me pause - but then I saw 2033 in the first line of the article along with the phase-out schedule. Should not be a big deal for round earth dwellers.
    Even 5 years seems like it much too slow of a rate, to me. They need 12 to do it?!

    Yeah, it's a slow crawl, but at least in parts of the US I still encounter POS checkouts, gas pumps, and mom & pop stores/restaurants that don't have chip readers. Same deal with individual sellers at fairs, farmers markets, flea markets, etc., who are using older Square swipe readers. To calibrate the slowness of the crawl in the US, I know that more than 10 years ago I had problems with my company issued credit card when traveling in Europe and Asia because it didn't even have a chip in it and at the time even coffee kiosks had chip readers.
    ioniclewatto_cobra
  • Reply 8 of 31
    crowleycrowley Posts: 9,119member
    I got a new MasterCard Debit card a couple weeks back which has gone for the clean front side like the render, no numbers, no name etc, and all the details on the back, printed, not embossed.  It's kind of weird, makes the card feel very insubstantial, more like a hotel key card than something I could spend thousands with.  It has a magnetic strip, not that I'll ever use it; does any country other than the USA still have any use for this technology?
  • Reply 9 of 31
    mknelsonmknelson Posts: 864member
    crowley said:
    I got a new MasterCard Debit card a couple weeks back which has gone for the clean front side like the render, no numbers, no name etc, and all the details on the back, printed, not embossed.  It's kind of weird, makes the card feel very insubstantial, more like a hotel key card than something I could spend thousands with.  It has a magnetic strip, not that I'll ever use it; does any country other than the USA still have any use for this technology?
    Yes, but not often (Canada).

    Chip and Pin works best for large transactions. Sometimes, if the chip has a problem (usually just dirty - rub it for a second) it'll say to use the magstripe, but that has reduced security - if you try the magstripe first the terminal will say NO! Use the chip! Some business cards still use the magstripe rather than the chip. Presumably, they think staff can't remember PINs.

    Tap has limits on the transaction amount, except for debit (was $100, often $200 now). For Debit it can be set by the cardholder and the bank, or the person who stole the card and the bank. And then the store gets stuck with a fraudulent transaction chargeback because there is no security on tap and that's somehow the store's fault.
  • Reply 10 of 31
    in case anybody is interested, i moved from the US to Europe this year.

    Here in Yurp, it's damn near 100% contactless. I took it a step further, I am one of the seeming few who pays with their phone. But it works fine, I have yet to find the store that cannot take Apple Card transactions. Can't say that in the US, contactless payment is very much hit-or-miss as far as acceptance by merchants.

    Where I live now, many people still take out their bank card and wave it at the terminal, but NOBODY swipes a card here.
    edited August 17 JWSCwatto_cobra
  • Reply 11 of 31
    riverkoriverko Posts: 132member
    mknelson said:
    And chip and pin for larger purchases.
    No need for chip and pin. Contactless and pin is fine even for large purchases. At least here in CZ it works perfectly fine.
    watto_cobra
  • Reply 12 of 31
    HrebHreb Posts: 18member
    Maybe they could also get rid of the embossed digits on the front.  Not optionally, but mandatory, and say ~30 years ago?
    watto_cobra
  • Reply 13 of 31
    crowleycrowley Posts: 9,119member
    riverko said:
    mknelson said:
    And chip and pin for larger purchases.
    No need for chip and pin. Contactless and pin is fine even for large purchases. At least here in CZ it works perfectly fine.
    Interesting, I've never seen contactless and PIN combined.  Does it completely do away with the transaction limit of contactless?
    watto_cobra
  • Reply 14 of 31
    22july201322july2013 Posts: 2,657member
    I haven't seen my card's stripe used in decades. (Owe Canada!)
    watto_cobra
  • Reply 15 of 31

    Who’s Responsible for Fraud with EMV Cards in the U.S.?

    For the consumer, nothing really changes when it comes to fraud liability with EMV cards. You won’t be held liable for fraudulent transactions in most cases, as long as you alert your card issuer.

    Liability for fraud usually rests with the card issuer or payment processor, depending on the specific terms of the account. However, since the transition to EMV technology, fraud liability now lies with the “least-EMV compliant party,” which in some cases might be the merchant. This basically means that if the merchant didn’t install a new EMV system and people are forced to use the mag stripe, the merchant will be held liable for fraud if it occurs.

    There are currently four important dates in what is known as the “EMV liability shift:”

    • October 1st, 2015: Liability for fraud for most card present transactions switched to the least-EMV compliant party (excludes automated fuel dispensers at gas stations).
    • October 1st, 2016: ATMs were included in the new liability rules, with the least-compliant party being held liable.
    • October 1st, 2017: Automated fuel dispensers at gas stations were set to be included in the liability shift, but in 2016 this date was moved three years back.
    • October 1st, 2020: Automated fuel dispensers at gas stations will be included in the new liability rules.

    So October 2020 was the new date at which all card present transactions in the U.S. will be held to these standards, including automated fuel dispensers.


    gregoriusmmuthuk_vanalingamGeorgeBMacwatto_cobra
  • Reply 16 of 31
    rcfarcfa Posts: 1,124member
    Mag stripes have one advantage: I’ve had several cards where chips or NFC circuits got busted, and the stripe still worked.
    In the old days, if all broke down, there were the raised numbers and letters for carbon-copy credit card transactions, which are pretty much history by now.
    They better figure out a way to make card numbers indestructible, since in newer cards they wear off.
  • Reply 17 of 31
    crowley said:
    It has a magnetic strip, not that I'll ever use it; does any country other than the USA still have any use for this technology?
    Japan uses an NFC standard (FeliCa) different than most of the world, so if you go there and don’t have an iPhone, you’ll probably be using the mag stripe. 
  • Reply 18 of 31
    rezwitsrezwits Posts: 759member
    Heck I remember working at a bank back in 1990-1992, and using the "Carbon Slide Imprint" or whatever that was called, like oh... about 5 times?  In a 2 year period?  That was in 1992!  That got phased out IDK when but that "happened."  Kind of amazing now 30-40 years later the NEXT verification in line?  wow...
    watto_cobra
  • Reply 19 of 31
    Would this mean cards could change shape and get smaller?  I envision smaller cards shaped with the chip area plus a little thumb shaped area where you could hold the card from when inserting/removing the chip into the reader.  
    Or skip the card and just use my watch, which works at a lot of places in the US now.  :smiley: 


    watto_cobra
  • Reply 20 of 31
    JWSCJWSC Posts: 1,052member
    dewme said:
    The headline gave me pause - but then I saw 2033 in the first line of the article along with the phase-out schedule. Should not be a big deal for round earth dwellers.
    One has to wonder how many physical credit cards will still be in use by 2033.
    watto_cobra
Sign In or Register to comment.