That makes it much harder for hackers to lift consumers’ information from these cards, even if they have a reading device at a POS terminal.Īnd while the public is rapidly adopting these cards, many merchants do not yet have card readers with EMV chip technology. In comparison, chip cards utilize EMV chip technology, and they are much more secure because they generate temporary authentication codes for each digital transaction. These cards can easily fall victim to skimming devices. The information on them is static and unchanging, including the encryption that protects users’ personal information like their cardholder name, address and bank account number. However, magnetic stripes have a big flaw.
In the past, magnetic stripes included all the information a card reader needed to confirm and facilitate an electronic transaction. Why is Mastercard making the switch?Īlthough Mastercard is the first payment company to phase out magnetic stripes, the announcement is unsurprising in many ways. Other credit card companies may follow and discontinue magnetic stripes, as well. The company plans to phase out magnetic stripes on newly issued credit and debit cards over the next 10 years. Mastercard announced that it’s getting rid of magnetic stripes for all of its cards, except for prepaid cards, like gift cards. Here's what you can do to prepare for this shift. Mastercard is phasing out credit and debit cards with the plastic stripe and is replacing them with more secure technology.