Smart Card Vs Magstrip
Plastic cards are widely used by individuals and companies in order to transact online and offline payments. Whether it is a credit card or a debit card, plastic cash cards come in the form of smart cards (with a chip) as well as a magstrip (running across the back). However, due to recent technological developments, there has been a sharp decline in magstrip cards as smart cards become increasingly popular as they are much safer and efficient.
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Smart Cards and Magstrip Cards compared
Below are the benefits and drawbacks of using smart cards and magstrip cards as payment solutions.
|
Smart Card |
Magstrip Card |
| Advantages
Security – due to Chip and PIN system, only the card holder can access funds from ATM machines as well as make payments at POS terminals. Fast – transactions are processed quickly after PIN code is entered. Efficient – due to the fast speed of processing, the transactions are completed efficiently. |
Advantages
Accessibility – due to late introduction of Chip and PIN, magstrip is a type of card that is more widely recognized. Traditional – it has been around longer therefore people tend to rely on magstrip as it is used widely. Global – many countries have not integrated Chip and PIN technology. |
| Disadvantages
PIN – in the event that cardholder forgets the PIN code, they are unable to utilize their card for making payment transactions. Accessibility – Chip and PIN services are still in the process of being integrated worldwide therefore their usage is limited. |
Disadvantages
Security – in the event that card is stolen, thieves are able to make transaction using magstrip as no PIN code required. Slow – due to the “swipe” mechanism this method is often quite slow and causes delays when making payment transactions. |
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