Credit and debit card magnetic stripes are basically relics. But in the U.S., they are still ubiquitous because our payment methods are behind the rest of the world. Mastercard will be changing that starting in 2024.
Mastercard will start phasing out credit card stripes in 2024. That's because the stripe will no longer be required on cards in Europe. Most of the world uses EMV chips instead of depending on stripes. For the U.S., the transition away from stripes will start in 2027. By 2029, new Mastercard credit and debit cards will not have the stripe. By 2033, they will be gone entirely.
By the end of 2015, only 42% of U.S. merchants had installed chip-and-PIN terminals. Uptake slowly progressed from there. Chips and contactless payment adoption have drastically increased since the pandemic. That's helped EMV adoption in the U.S., which greatly lags behind the rest of the world. In 2020, only 73% of the U.S. used EMV chips. This is partly because of the size of the U.S. and its low fraud rates.
Magnetic stripe technology dates back to the 1960s. It was not uncommon to see merchants, especially small businesses, using a flatbed imprinting machine until recently. There are the trays that you lay a card in, rack an imprinter over, and have it create a carbon paper copy of the transaction. These machines were also called knuckle busters for obvious reasons.
The global EMV chip standard arrived in the 1990s. It allowed for more secure transactions. More information could also be stored on chips than on magnetic stripes. Today, 86% of global card transactions are done using EMV chips. Even with a chip, authentication must still occur. A PIN is standard for authentication, but biometrics are gaining ground as well.
Mastercard will be the first payments network to phase out magnetic stripes.