Payments giant Mastercard has said it will phase out magnetic strips in debit and credit cards starting 2024, and will focus on alternatives like contactless and biometric cards.
(Subscribe to our Today's Cache newsletter for a quick snapshot of top 5 tech stories. Click here to subscribe for free.)
“Based on the decline in payments powered by magnetic stripes after chip-based payments took hold, newly-issued Mastercard credit and debit cards will not be required to have a stripe starting in 2024 in most markets,” the company said in a statement.
Magnetic cards were introduced in the early 1960s, largely credited to IBM, which allowed banks to encode card information on to magnetic tape laminated to the bank. This paved way for electronic payments terminals and chip cards that offered more security and real-time authorisation.
However, changing consumer habits for payments and the development of newer technologies have led to the decline in chip-based payments, the company noted.
Also Read | Why has the RBI barred Mastercard from issuing new cards in India?
The move comes as contactless cards and biometric cards are gaining popularity due to its global interoperability and security. Contactless cards use near field communication (NFC) or radio-frequency communication (RFID) that enables users to simply wave the card near a point-of-sale (POS) terminal.
Tech giants have also started including contactless payments in their services, such as Apple Inc’s Apple Pay, that was integrated with all iPhones starting iPhone 6 in 2014.
Biometric cards require the user’s fingerprints to authenticate transactions instead of swiping the card in the POS terminal.
