President at Accept Credit Cards
MasterCard has announced that it will be phasing out magnetic strips on all of its credit and debit cards over the next 10 years to have strictly chips and contactless payments. Magnetic strips have been a card standard since the 1960’s. The transition will start in 2024.
Magnetic strips were a huge improvement over the flat bed imprinting machines and having to look up card numbers on reams of paper to make sure it was not listed stolen, or had other issues. Then came the EMV Chip which holds card holder information more securely in the 1990’s.
MasterCard has found that although the imbedded chips on credit and credit cards has been on all of its US based cards for over 10 years, the US market still only has about 73% of merchants using machines that are Chip capable. There are multiple reasons for this, but the biggest reason seems to be having merchants feel that upgrading to Chip capable machines is not worth it as magnetic strips still work.
By eliminating magnetic strips, MasterCard hopes this will encourage merchants to upgrade equipment as a faster rate, which will help transactions be more secure and keep the rise in Contactless payments such as digital wallets on consumer smartphones, which has increased by 1 billion dollars in the first quarter of 2021.
Any merchant that accepts face to face transactions needs to upgrade their equipment as soon as possible to get ahead of MasterCard’s plan to remove the magnetic strips. While MasterCard is the first to announce this, be sure that the other Card brands will follow.
Leave a Reply