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Mastercard Says 'Goodbye' to the Magnetic Stripe
A Bit of the History
Magnetic stripes were added to our payment cards in the 1960s to make them more secure and give us a faster electronic way to capture more card and payment data; rather than completing paper vouchers by hand or with the embossed card in a 'zip zap' machine - watch your knuckles!.
The biggest 'win' was that they stopped card number transposition at a merchant or keying errors at the acquirer. It meant that the stripe could also hold significantly more card data, cardholder details and other proprietary/
We still needed the embossed data on the card in case the magnetic stripe failed or for merchants that could not read the stripe. There was regular accidental erasing of the magnetic stripe and dirty swipe readers in merchant POS devices did not help either.
The Achilles heel for the magnetic stripe was its simplicity and ease with which it could be read, copied and re-written by fraudsters. More online authorisations for card payments partly addressed this, but issuers still approved the fraud on these 'counterfeit' cards. At the start of the 'patchy' online authorisation 'role out', authorisation 'Floor Limits' and 'Hot Card File' lists were widely deployed but problematic. And fraudsters would then easily generate fictitious account details to bypass Floor Limits or card black lists, to copy fake card details or extract genuine magnetic stripe data and placed on real plastics, counterfeit cards and of course 'white plastic' for ATM use.
In the early 1990s, chip card technology was introduced - both at ATMs and POS. But with different chip standards being deployed, it required a more global approach - which was finally delivered through EMVCo specifications that were supported with industry incentives, and a host of new complex rules and implementation challenges.
To read full article visit https://www.riskskill.com/
Riskskill is a leading Europe-based payments and risk management consultancy and global GARS Reviewer for Visa. For more information visit www.riskskill.com
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