Vicki Hyman at Mastercard has been writing about the end of the magnetic stripe on our debit and credit cards:
In the early age of modern credit cards, they had to write down account information for each card-carrying customer by hand. Later, they used flatbed imprinting machines to record the card information on carbon paper packets, the sound of the swiping of the handle earning them the name, zip-zap machines. (They were also dubbed “knuckle-busters” by the unfortunate clerks who skinned their fingers on the embossing plate.)
And how could clerks tell whether the customer was good for the purchase? They couldn’t. Credit card companies would circulate a list of bad account numbers each month, and the merchant would have to compare the customers’ cards against the list.
The arrival of the magnetic stripe changed all that. An early 1960s innovation largely credited to IBM, the magnetic stripe allowed banks to encode card information onto magnetic tape laminated to the back. It paved the way for electronic payment terminals and chip cards, offering more security and real-time authorization while making it easier for businesses of all sizes to accept cards. That thin stripe has remained a fixture on billions of payment cards for decades, even as technology has evolved.
But now the magnetic stripe is reaching its expiration date with Mastercard becoming the first payments network to phase it out.