Mastercard says the transition will begin in 2024, when band will no longer be required on new cards in regions like Europe where smart cards are already widely used. In the United States, where the adoption of chip payments has been slower, the transition will begin in 2027. As of 2029, no new Mastercard debit or credit cards will have a magnetic stripe, and they will have completely gone by 2033.
Cards equipped with chips will become the new standard. The chip is more secure than a magnetic strip because it creates a unique transaction code, which is verified by the bank. This makes them harder to duplicate than magnetic stripes and prevents hackers from stealing complete credit card information by hacking into retailer payment systems. Chip credit cards were first developed in the 1960s, but it took decades for them to become popular because the cards didn’t work with all terminals. Thus, a new global standard has been developed for universal acceptance called EMV.
The amount of contactless transactions have increased by 1 billion in the first quarter of this year compared to last year, it says. Globally 45 percent of in-person checkout transactions in the second quarter of the year were contactless.