Contactless payments are the future, and it’s about time that banks and credit card companies get on board. Mastercard has announced that beginning in 2024, it will start phasing out its physical cards with magnetic strips on the back. It plans to eliminate their use by 2033.
Mastercard is the first major company to announce the changeover since contactless payments took the lead. The percentage of in-person card transactions declined in the last year alone, with in-store mobile payments growing nearly 30% in the US. There has also been an uptick in “proximity-based” mobile payments, which refers to the use of NFC or QR codes. Analysts estimate that number will grow about 24% in the next year.
Physical cards aren’t going anywhere, however. Instead, Mastercard will dole out cards with built-in chip payment functionality. These are already widely used in other markets like Europe. The US has been slow to adopt EMV-based chip payments, which are more secure than the officially antiquated magnetic strip methodology. Mastercard’s stance could help spur the rest of the industry to consider a similar transition.
Mastercard might also be making space for the other methods of payment it’s cooking up. Recently, Samsung and Mastercard announced they are working on a credit card with a built-in fingerprint scanner for those who still want a physical card in tow. It’s called a “biometric card,” and it will have chips embedded inside, courtesy of Samsung. The card would do away with PINs entirely in favor of a thumbprint. Samsung will be gradually rolling out the new cards in South Korea later this year. This might explain why Samsung did away with its MST technology, which relies on a magnet embedded inside a smartphone to spoof itself as a traditional card.