Mastercard is set to ditch the magnetic stripe from all its cards by the end of the decade as chip cards continue to dominate.
With global EMV chip transactions now making up 86 per cent of face-to-face sales, the giant payment network will begin phasing out magnetic stripes in 2024 in regions like Europe where chip cards are already widely used, with no new stripe cards to be produced from 2029; no Mastercard credit or debit cards will have magnetic stripes from 2033 onwards.
EMV chips represent a significant increase in both convenience and security over the magnetic stripe, says Ajay Bhalla, president of Mastercard’s Cyber & Intelligence business.
“It’s time to fully embrace these best-in-class capabilities, which ensure consumers can pay simply, swiftly and with peace of mind.
“What’s best for consumers is what’s best for everyone in the ecosystem,” he said.
The news comes as Commonwealth Bank launches its StepPay buy-now pay-later service, which is rolling out to 100,000 customers who preregistered and can load the card into their digital wallets from today. StepPay is set to bring in more revenue for Commonwealth Bank as Mastercard classifies the payments as credit rather than debit, allowing the bank to claim 80 cents in “interchange fees” per $100 of transactions compared to the eight cents for Mastercard debit transactions and two cents for Eftpos transactions.
Contactless Mastercard transactions increased by one billion globally year-on-year in the first quarter of 2021, while 45 per cent of all global in-person checkout transactions in the second quarter were contactless.
