All credit and debit cards tend to have a magnetic strip, often referred to as a magstrip, which runs across the back of the card. These cards use magnetism, which are tiny particles of iron, in order to store information. Magnetic strips were first introduced in 1960 in the US as a government security feature.
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Magnetic strip explained
Credit and debit cards are the most widely used tool for making online payments for goods and services. The magnetic strip at the back of cards is a huge factor in enabling individuals and business professionals to utilize this form of payment in their everyday personal and work life. Due to the recent introduction of Chip and PIN, the magstrip on cards has become less widely used however; it is still an important feature of credit and debit cards.
The method of employing the magstrip is by swiping the card into a magnetic reading head. Only through this physical contact can individuals complete a payment as information from the card is detected by the machine, thus entering the system. The magnetic strip on credit and debit cards stores data by altering the magnetism of tiny iron-based magnetic particles that are positioned in the strip at the back of the card.
The development of Chip and PIN technology in order to complete payment transactions has had a detrimental effect on the usage of magstrips. Nevertheless, magstrip cards are still widely used – most notably for American Express cards as they do not feature the Chip and PIN technology.