Magnetic strips on cards were first introduced in the 1960s, which at the time was an innovative feature aimed at making card payments more simple and faster. Since then EMV chips have come along and in most places, it became the go-to way to pay using a card – in fact, 86% of in-person transactions globally happen using the EMV chip.
The magnetic strip will be transitioned out in Europe from 2024 – when the magnetic strip will no longer be required in Europe.
Within the US, the transition will take a little longer. The transition will begin in 2027 in the US and by 2029 no new cards will be issued with magnetic strips – all cards with the strip will be gone by 2033.
It would appear the reason for Europe being so far ahead with this transition is because the US has been much slower to take up usage of EMV chip payments and contactless. Unlike in Europe, for example in the UK, anyone can quite easily get by with chip and pin payments in everyday life, but even more specifically it’s easy to get by in the UK using only contactless payment methods such as Apple Pay.
It is a welcome move from Mastercard since removing the magnetic strip is a step forward with improving and simplifying payment technology. We would guess in some years time the next step would probably be to transition away from the EMV chip and push for all contactless payments, which are faster and just as secure (if not more).