Is This the End of Credit Card Magnetic Strips?

Is the dark, broad magnetic strip on the back of the credit cards that you–or your customers–swipe during purchases going the way of the eight-track tape player and dial-up modem? That appears to be the case, as Mastercard drops the so-called magstripe in favor of the more popular silicon chip that’s also far harder for scammers to hack.

Mastercard began the multistage process of relegating the magstripe to the dustbin of history in April, when new cards issued in Europe omitted the ebony landing strip on the back. The change–which is going almost unnoticed on the Continent, where use and preference of the French-invented, chip-embedded smartcard is virtually universal–will come to other regions over the next several years. As of 2027, U.S. banks will have the option of dropping the band as well, with its scheduled disappearance on new cards set for 2029. Four years after that, it will vanish altogether on plastic worldwide.

Why is there no hue, cry, or pro forma expression of nostalgia for the magnetic tech invented by an IBM employee in the 1960s, and widely adopted across the globe by banks, financial companies, hotels, and transit systems since?

Perhaps because its initial utility–encoding personal and banking information of the holder as a means of identity verification–has been undermined by the increasing ease with which scammers hack magstripes. Once that data gets copied, fraudsters run up unauthorized purchases until banks take notice and cut the associated credit card off, causing all sorts of headaches and financial stresses for cardholders. It’s hard to get wistful for technology that set you back $8,000 in consumer electronics, furniture, and watches you never saw–much less got to use.

Meanwhile, the vast majority of consumers will probably wonder what took Mastercard so long to dropkick the boxy mustache on the back of its cards–and why other financial service companies haven’t done likewise.

According to EMVCo.–which oversees standards for payment methods used by American Express, Discover, JCB, Mastercard, UnionPay, Visa, and others–transactions with silicon chip cards and authorized PIN codes instead of swipes are now the rule. That smartcard tech was used in 93.9 percent of all purchases EMV members processed between June 2022 and July 2023, the last period for which the company has updated data. 

Those smartcards made up 90.7 percent of the total EMV cards in use and composed 99.7 percent of all transactions in Europe during the same period, compared with 93.2 percent and 99.4 percent respectively in Africa, and 88.9 percent and 98.6 percent in Latin America. The U.S., however, lags behind, with chip-embedded cards representing just 65 percent of all EMV plastic in the country, and involved in 89 percent of purchases. 

Continued use of the magstripe is also a big reason why the U.S. leads the world in credit card fraud, hosting 46 percent of the global total. According to the Merchant Cost Consulting payment services company, losses to American consumers and banks from that theft is expected to cost $12.5 billion in 2025, and is on a 46 percent growth pace in year-on-year terms.

But if U.S. consumers and businesses aren’t motivated by the promise of lower fraud rates to follow Mastercard’s lead in ridding themselves of magstripes, there’s another reason to dump it. That band of plastic on the backs of their cards is made from very polluting heavy metal components that virtually everyone involved in the long chain of transactions and related technologies is better off without.

“Removing the magstripe on payment cards delivers carbon savings by eliminating the use of ferro-magnetic materials and the associated application processes–including card body lamination,” notes trade industry organization Smart Payment Association. “With one less component, production wastage will be minimized, while the wider choice of ecofriendly materials for card bodies will simplify end-of-life recycling.”

Greener payment methods for consumers and businesses, and far more difficulty for scammers working to rip people off. What’s not to love in credit cards’ shaving their magstripes off?