The growth of contactless payments throughout 2020 cannot be ignored but there is still a need for cards especially here in South Africa where the digital divide is ever present.

However, Mastercard feels that physical cards could do with some updating and as such it’s removing the magnetic stripe from its cards starting in 2024.

“Based on the decline in payments powered by magnetic stripes after chip-based payments took hold, newly-issued Mastercard credit and debit cards will not be required to have a stripe starting in 2024 in most markets,” manager of global communications at Mastercard, Vicki Hyman.

“By 2033, no Mastercard credit and debit cards will have magnetic stripes, which leaves a long runway for the remaining partners who still rely on the technology to phase in chip card processing,” adds Hyman.

According to Mastercard, only 11 percent of card users in the US preferred to swipe while the majority of over 50 percent prefer using a chip-card payment option.

What we find interesting is that both the magnetic stripe and chip were released at around the same time in the 1960s. However, the concept of a chip-card only caught on many years after it was released and even then the chips used by different issuers didn’t work with every terminal.

Today, Mastercard says that the EMV chips present in modern cards are used for 86 percent of face-to-face transactions thanks to standardisation that happened in the late 1990s.

While contactless payments are becoming more popular we doubt that physical cards will disappear soon. Then again, we weren’t expecting magnetic stripes to disappear and here we are.

[Source – Mastercard]