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.

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


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.


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.


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.


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.