Mastercard revealed that it would phase out magnetic stripes on its credit and debit cards over the next decade to push the company with safer alternatives.
The firm said it would become the first payment network to gradually ditch the technology, which debuted in the 1960s.
Metal bands allowed banks to store data on the metallic tape piece attached to the cards.
But contactless payments, microchips, biometric identification and other newer card technologies have displaced the magnetic stripe.
In a blog post last week, Mastercard said the technology was “reaching its expiration date.”
While card swipes are not going away yet, as recently issued Mastercards still require magnetic stripes, they will be optional within two years.
Therefore, the company has decided not to issue cards with magnetic stripes by 2029, expecting them to be entirely phased out in 2033.
Mastercard said the ten-year-long timeline “leaves a long runway for the remaining partners who still rely on the technology to phase in chip card processing.”
Magnetic tape used to make the stripes on the cards are not particularly safe. Also, most cards have embedded chips nowadays and will be the new standard.
In fact, Mastercard says that 86% of face-to-face card transactions use EMV globally. Also, in the United States, 73% of transactions use chips.
Chips create a unique transaction code that is difficult to duplicate and banks always verify, preventing hackers from stealing credit card information if payment systems are hacked and becoming more secure alternatives.
New technologies, including biometric cards that use fingerprints to verify the cardholder’s identity, are also on the rise.
Moreover, contactless payments have rapidly grown in the credit card industry.
Mastercard said there were a billion more transactions of this type recorded in the first quarter of 2021, compared to the same period last year.
“It’s time to fully embrace these best-in-class capabilities, which ensure consumers can pay simply, swiftly, and with peace of mind,” Ajay Bhalla, president of Mastercard’s cyber & intelligence business, said in a statement.
“What’s best for consumers is what’s best for everyone in the ecosystem,” he added.
Partner banks backed Mastercard’s decision to phase out cards with embedded magnetic stripes.