Mastercard to ditch magnetic stripes for chips and touch-less taps for its cards

Mastercard has decided to abandon magnetic stripes for chips and touch-less taps within a few years, ending in 2033.

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Marketplace has recently reported that Mastercard has decided to abandon magnetic stripes on the back of its cards in 2024, and adopt chips and touch-less taps by 2033.

Optimizing security has led makers of credit cards to design better models. Swiping credit cards in machines have left a trail of copies in carbon with numbers and signatures in them just like handheld machines that stores used to have.

Christine Parlour, a professor of finance at the University of California at Berkeley, said, “The mag stripe just contains that secret information, which is your card number, your banking information. So a person can’t see it, but a machine can see it… The back end of credit-card processing is hideously complicated”.

Copying what a machine can see, so makers of credit cards placed chips that assign a unique code to every transaction, decreasing fraud that comes with purchases in person, yet magnetic stripes exist.

Change increases costs for businesses in this case, with makers of credit cards exposed merchants to fraud in transactions from swipes in 2015, except for one industry.

Ted Rossman, an analyst from Creditcards, said, “The gas industry says that to upgrade their pump-payment technology, I’ve seen estimates of anywhere from USD 5,000 to USD 10,000 per pump”, adding that stations for pumping gas must adopt chips by this spring.

Some other countries trail the United States, still having a complex banking system, in adopting new technology for credit cards, but makers of credit cards must encourage users to switch to the new technology.

Chris Reid of Mastercard said, “We really are creatures of habit, that is true”, adding that payments by chips now comprise more than 85 per cent of transactions from cards in person.

Users considered chips slow and a bit awkward before better chips arrived. Credit cards may include biometric hand-prints and fingerprints in the future.