For most consumers, it’s second nature to dip or tap a payment card at a terminal to complete a sale. But not too long ago, payments were all about the swipe.
Magnetic stripes were first introduced in the 1970s and became commonplace in the 1980s. Despite the convenience this technology originally provided as an alternative to imprinting card information, it also opened the door for fraudsters to steal account data for unauthorized purchases and counterfeit cards. With the 2015 liability shift, EMV (chip card) technology became widespread and marked the beginning of a new and safer era for card transactions. However, it was also the beginning of the end for magnetic stripes.
This was solidified with Mastercard’s announcement regarding the discontinuation of magnetic stripes on the payment cards it issues. It’s likely a harbinger of similar actions from other card brands. What does the imminent retirement of magnetic stripes mean for businesses that accept swiped card payments? Here are three action items for businesses to consider.
1. Audit and upgrade card terminals.
Businesses that still rely on magnetic stripe technology will want to audit their existing card terminals to ensure that all hardware can support chip card transactions. If not, it’s time to upgrade with new equipment that supports an all-chip environment. It’s also a good opportunity to turn on the capability for contactless, digital wallet, and biometric transactions to provide a wide range of payment options for customers.
2. Keep chip card terminals clean and functional.
In the absence of a magnetic stripe, the option for EMV fallback transactions is eliminated as well. Fallbacks occur when a chip card cannot be processed and the magnetic stripe is used as an alternative to complete the transaction. Without magnetic stripes, fallbacks are no longer an option. Therefore, it’s more important than ever to keep chip card readers clean and functional, especially in high-impact environments. Learn more about EMV fallback here.
3. Communicate the shift to customers and employees.
Customers that are used to swiping their cards will need to know that dips are now the standard. A sign at the register or on the card terminal can be a helpful reminder to shift their behavior. In addition, employees will need to know that swipes are no longer an option and be prepared to guide customers through the new payment process.
Does your business need guidance as magnetic stripes near their end? Get in touch with Paystri. We can help.