Mastercard is planning to say goodbye to the magnetic strip on its cards

Payments giant Mastercard said it’s getting rid of the magnetic strip on cards starting in 2024. The move is being taken largely as a result of the growth in adoption of new technology, including chip cards and contactless payments.

Why should we care?
The magnetic strip on debit and credit cards was once seen as an innovative tool during its rollout in the 1960s. But new technology is rendering it obsolete. The strip will begin to disappear from cards in Europe from 2024, while institutions in the U.S. will no longer require it in 2027. By 2029, Mastercard credit and debit cards will no longer be issued with a magnetic strip, while prepaid cards in Canada and the U.S. will be exempt from this change. “Today’s chip cards are powered by microprocessors that are much more capable and secure, and many are also embedded with tiny antennae that enable contactless transactions,” Mastercard said in a statement. In a study referenced by Mastercard that was carried out by the Phoenix Consumer Monitor, 81% of American cardholders said they would be comfortable with a card that does not have the magnetic strip, and 92% would increase or keep usage of their cards the same if the magnetic stripe was no longer on the card. In the first quarter of 2021, Mastercard saw 1 billion more contactless transactions compared to the same period in 2020, and in the second quarter of 2021, 45% of all in-person checkout transactions globally were contactless.