Mastercard to phase out magstripe cards: What that means for you

End of an Era: Mastercard Phases Out Magstripe Cards + Implications for C-StoresEnd of an Era: Mastercard Phases Out Magstripe Cards + Implications for C-Stores

The end of swipe is upon us. Mastercard has announced it is phasing out the use of magstripe cards.
Yes, after six decades of swipes, that little magnetic stripe on the back of your bank cards is going away. The move has plenty of implications for convenience stores that have not upgraded to outdoor EMV.

Starting in 2024, Mastercard will no longer require its credit and debit cards to have a stripe in most markets. By 2027, U.S. banks will no longer be required to issue chip cards with a magnetic stripe. Mastercard expects to eliminate magstripes by 2033.

Before we discuss what this means for c-stores, let’s remember how we got here.

Back to the Future

The magstripe was invented in the 1960’s to replace flatbed imprinting machines (aka knuckle-busters), which cashiers used to record credit card information.

So how were stores able to instantly verify a customer’s account? They couldn’t. Instead, card companies would send merchants a list of bad account numbers and the merchant had to match their own lists to verify purchases.

Fast-forward to today, EMV chips are used for 86% of face-to-face card transactions globally. Only 11% of consumers still prefer the magstripe, according to a December 2020 survey paid for by Mastercard.

That negative consumer sentiment is directly related to the lack of security measures surrounding magstripes. Criminals have proven they can easily steal consumers’ cardholder data using malware and skimmers to embed that stolen data onto counterfeit magstripe cards. On the other hand, cards with EMV chips are encrypted and cannot be so easily stolen.

What Does it Mean for C-Stores?Outdoor EMV Liability Shifts to Convenience Store Retailers

For convenience stores that have already upgraded their fuel dispensers with outdoor EMV technology, it’s business as usual.

For retailers who still haven’t invested in modern payment technology as mandated by EMV regulations, business is about to become even more complicated. Mastercard was the first to take this position on magstripes; but the other major card brands are very likely to follow suite with their own plans to phase out magnetic stripes from credit cards.

If retailers with old equipment don’t upgrade soon, their customers could be forced to use cash to pay for gas inside the c-store. As most fuel business owners know, the lion-share of customers pay at the pump. Less than a third of consumers still use cash at all. Taking the pay-at-the-pump option off the table is a near-automatic business killer.

The end of magstripe cards isn’t the only problem non-compliant retailers face. Many major oil companies are now charging non-compliance fees for any station without EMV-ready forecourts. Some are even pulling the payment terminals out of the pumps altogether to avoid fraud.

The Bottom Line

Skipping on EMV? Don’t Say We Didn’t Warn You…
These complications are nothing compared to the constant and immediate threat of chargebacks as a result of fraud migration. As more retailers turn on EMV at the pump, criminals are seeking out easier targets that have not been upgraded.

While there are some tactics retailers can use in an attempt to mitigate fraud, none of them are as effective or foolproof as the mandated EMV upgrade.

Ready to start protecting your business and customers from fraud with EMV-compliant payment technology?

Please feel free to contact us at 1-800-451-4021 or Email Us with any further questions or inquiries.

Looking for Gilbarco equipment? Click on the links below to visit our web store :

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Gilbarco Forecourt Merchandising Options

Click here to search all Gilbarco equipment and parts listed in our web store.

The John W. Kennedy Company appreciates your business and continued support!


More On EMV From Our Friends At Petroleum Processing Solutions

Petroleum Processing Solutions logoWith all merchants who accept credit cards facing the impending shift to the EMV standards, our partners at Petroleum Processing Solutions will be providing us with some helpful information to guide you through the EMV mine field of equipment, processing standards and requirements all will face in the next few years.

About EMVCo

EMV Chip CardEMVCo is a worldwide group comprised of six member organizations (American Express, Discover, JCB, MasterCard, UnionPay, and Visa) and supported by numerous banks, vendors, and other industry stakeholders who act as associates.  Among these associates, EMVCo is managed by a Board of Managers and an Executive Committee, as well as various Working Groups.  Their goal is to facilitate the most secure payment transactions possible through utilizing and evolving the EMV Specifications through processes such as card and terminal evaluation, security evaluation, and management of interoperability issues.

8 FAQs About EMV Cards

PPS EMV article 1Since the shift began towards EMV began here in America a year and a half ago, vendors and industry professionals have had to implement a great deal of new technology and processes into their businesses.  Because it is an ongoing process, many questions are often asked about EMV, including what makes them more secure than traditional cards, how they are used, if “card-dipping” is the only way to use them, whether or not they will require a PIN, who will be liable for costs in the event of fraud, whether or not the shift EMV is complete, if an EMV card will work at a retailer not yet supporting the technology, and if an EMV card can be used while traveling outside the country.

Living with EMV

PPS EMV article 2Introducing EMV technology has come with its fair share of challenges and difficulties.  According to industry professionals, certain trends have been established, and from these trends, the course of the payment industry can be speculated going forward.  Among these findings are that most customers have chip cards in their possession, and that more stores will be accepting them in 2017.  As well, chip cards have been found to reduce counterfeit fraud and protect the card’s magnetic stripe (while they remain), and thanks to using data from the previous year and a half to improve the technology, transactions using the chip are now much faster and easier.  In addition, the loud beeping noises from EMV terminals are not likely to be necessary anymore.  Also, while ATM card skimming fraud saw a rise in activity during 2016, upgraded ATMs compatible with EMV technology should deter further card skimming.

Understanding Liability Shift

As EMV becomes the standard in payment processing technology, having the technology capable of accepting chip cards will no longer be an option for merchants.  As of now, magnetic stripes are still accepted as the transition continues, but businesses that do not support the more secure EMV transactions could pay a heavy cost in the event of fraudulent transactions.  As of October 1, 2015, a global POS counterfeit fraud liability shift went into effect in the United States, which holds that merchants that are not EMV certified are liable for any fraud resulting from a transaction with a customer in possession of a chip-enabled card.

If you would like to learn more about EMV and/or Petroleum Processing Solutions, contact us at (800) 451-4021.


The John W. Kennedy Company appreciates your business and continued support!

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