It’s time to say goodbye to the old credit cards: they worked great for 50 years, but now we need new technologies, more convenient, faster and safer.
The pandemic that began in 2020 has turned the world of payments upside down: less and less cash, resulting from fewer contacts, and more and more electronic payments, especially with credit and debit cards. It is precisely because of this that credit cards must evolve and adapt not so much to the present, for which they are still going very well as they have demonstrated in recent months, but for the future.
Mastercard is convinced of this, and together with Maestro is one of the two giants of cashless payments worldwide, and has announced the start of a journey towards the credit card of the future. It will be different from the ones we use today mainly because of a detail that seems small, but is not at all: it will no longer have a magnetic strip. Only chips in the credit cards of the future, goodbye “swipe” and welcome contactless: “It’s time to fully embrace the best features that ensure consumers can pay easily, quickly and with confidence,” said Ajay Bhalla, head of Mastercard’s Cyber and Intelligence division. But when will all this happen? Before long, even in Italy.
Addio swipe: since when
Mastercard has announced that it will eliminate the magnetic stripe from its payment cards starting in 2024 and in “most markets,” but it didn’t specify which ones. Certainly, however, among them will be from now on both the U.S. and Europe, so Italy as well.
In fact, Mastercard also specified that the magnetic stripe will disappear from newly issued credit and debit cards in Europe, and banks in the U.S. will no longer be required to issue cards with both chip and magnetic stripe starting in 2027.
The target is already marked: by 2029 no new payment cards will have a magnetic stripe (except for prepaid cards in the United States and Canada), and in 2033 those already issued will not have one either, because they will all be replaced.
What changes for users
The magnetic stripe in credit cards is an invention introduced by IBM in the 1960s and, therefore, is now over 50 years old. Its purpose was to store information about the card and its owner to limit fraud against banks, but also consumers.
Today, however, the technology is light years ahead and, unfortunately, both banks and fraudsters know how to use it. So far more robust systems are needed to limit fraud, and thankfully, they’re already there: chips. The next step will be the introduction of biometric authentication in the credit card, through a fingerprint reader similar to that of smartphones.
These new and more secure credit cards already exist, but are not yet widely used: they will allow the user to pay in contactless mode and without having to enter any PIN.
To further enhance the security of cashless payments, finally, “Enhanced Contactless” (ECOS) technology is coming, which applies robust encryption to transactions that is 3 million times harder to breach than current technology.