Mastercard will gradually phase out the use of magnetic stripes on its credit and debit cards over the next decade as the industry moves towards safer and more convenient alternatives such as chips and contactless payments, the company announced. The company says it will be the first payments network to phase out the technology, which dates back to the 1960s.

Mastercard says the transition will begin in 2024, when bandwidth will no longer be required on new cards in regions such as Europe where chip cards are already widely used. In the US, where the adoption of chip payments is slower, the transition will begin in 2027. From 2029, no new Mastercard debit or credit cards will feature a magnetic stripe, and by 2033 it will completely disappear.

Magnetic stripes were a huge improvement over the flatbed printing machines (aka knuckles) that cashiers used to write card data. But in the 1990s, the global EMV chip standard was introduced, which paved the way for more reliable storage of cardholder data on small integrated circuit chips embedded in cards. Currently, 86 percent of personal card transactions worldwide are carried out using EMV chips.

While chip cards are being marketed as the successor to magnetic stripes, Mastercard notes that contactless payments, which can be made both by card and digitally using most modern smartphones, have skyrocketed during the pandemic. In the first quarter of this year, the number of contactless transactions increased by 1 billion compared to last year, the report said. Globally, in the second quarter of this year, 45% of in-person transactions were contactless.