New Delhi. US-based payment technology company Mastercard will eliminate magnetic strips on its newly issued credit and debit cards from the year 2024 in most markets. By 2033, no MasterCard credit and debit cards will have a magnetic stripe.
According to a report in Business Today, the magnetic strip will be the first to be removed in regions like Europe where chip cards are widely used. Mastercard said banks in the US will no longer be required to issue magnetic stripe chip cards from 2027. No new MasterCard credit or debit cards will be issued with the magnetic stripe until 2029. However, prepaid cards are exempted from this change.
Today’s chips are powered by microprocessors which are much more secure. These cards are also connected to a small antenna which enables contactless transactions. Today, for each transaction, the chip generates a unique transaction code that is verified by the issuing bank to ensure that the card used is genuine.
There is a ban on issuing new cards in India from July 22
On July 14, the RBI had indefinitely banned MasterCard from issuing new credit, debit and prepaid cards for non-compliance with local data storage norms. The central bank had banned MasterCard from adding new domestic customers to its card network with effect from July 22, 2021. Explain that under the rules of data localization, the company needs to keep the data of Indian customers in the country itself.
No impact on existing MasterCard customers
Regarding the ban, RBI had said that its order will not have any effect on the existing card customers. Explain that MasterCard has been approved as a payment system operator under the PSS Act to operate the card network in the country.