Mastercard signals end of magnetic stripe on credit cards

The thin magnetic stripe on the back of a credit card is a staple of its design, with it being used since 1960 to handle payments at merchants around the world. However, changes in consumer payment habits has Mastercard considering the demise of the magnetic stripe.

From 2024, newly-issued Mastercard credit and debit cards will not be required to have the stripe at all in most markets, the payment network processor advises. By 2033, there won't be a Mastercard credit or debit card with a magnetic stripe at all.

As Apple Card uses Mastercard as its payment network for the physical card, it's possible that Apple could be among the earliest to remove the stripe, in favor of a cleaner appearance for the already-minimalist card.

The company cites the shift in consumer payments away from the stripe in favor of chip-based purchases and contactless payments, such as mobile payment systems like Apple Pay, as being behind the change.

In a December survey, more than half of Americans prefer using a chip card payment at a terminal rather than any other payment system, followed by contactless payments. Only 11% said they preferred to swipe their card, a figure that dropped to 9% for those with experience using contactless payments.

Another survey in July determined 81% of American cardholders would be comfortable with using a credit or debit card without the stripe, and then 92% would increase or keep using their cards if the stripe disappeared.

Mastercard's timeframe for the changes sees the stripe's disappearance starting 2024, with markets like Europe with high chip usage being the prime candidates. Banks in the United States won't be required to issue chip cards with a magnetic stripe from 2027.

No new Mastercard credit or debit cards will be issued with a magnetic stripe by 2029, the company reckons The exception would be prepaid cards in the U.S. and Canada which would continue to use the stripe for a while longer.