Like many things in the world, our payment habits are constantly changing. Never has this been more apparent than during the COVID-19 pandemic, when contactless transactions boomed due to the fear of catching the virus from tangible surfaces. Indeed, it is perhaps this catalyst that has spurred card issuers to embrace or speed up the implementation of other changes. Below we list some of the major changes that are currently happening to our credit cards
No more magnetic stripes
Mastercard has announced that as of 2024 the magnetic stripe on your credit card will start being phased out in places like Europe, where chip-and-pin payments are much more common. In the UK for example, all payments have been chip-and-pin since 2006.
As part of the next phase of the transition by 2027, banks in the US will also no longer be required to distribute cards with this stripe, with a final end to the technology worldwide planned for 2029. This leaves plenty of time for companies who still use the technology to put in place suitable alternatives.
And, while Mastercard is the first to move away from the magnetic stripe, it is likely that many other card issuers will follow. This is because the EMV chip is much more secure than using the stripe for payments. Unlike the stripe, the chip creates a unique transaction code after each payment attempt, which is then verified securely by the user’s bank. Overall, this makes the cards much more difficult to duplicate in a scam called ‘skimming’ and it prevents hackers gaining complete credit card information should they successfully hack into a retailer’s payment system.
What materials they are made of
For durability and portability, most credit cards in use today are made from PVC plastic. While the advantages of making them with plastic are clear, today, we also know that plastic pollution is a huge challenge facing our planet. Indeed, an estimated 8 million tons of plastic enter the oceans each year, and with its inability to break down easily, it is drastically affecting marine life.
There are, however, alternative materials and ways of manufacturing our credit cards that are much more eco friendly and that are becoming increasingly popular.
In 2020, following the footsteps of Dutch bank Triodos, Swiss bank UBS, launched a credit card for their customers made from a corn-based substitute. Instead of PVC, these cards are made from a substance called PLA, an 80% biodegradable material that can be recycled and is non-toxic if incinerated. Makers also claim users shouldn’t notice any difference using a PLA card and PVC card. This is because they claim it offers all the same functions and is just as sturdy as plastic.
Other card companies are opting instead to recycle plastic. In April 2021, HSBC announced it would eliminate single use plastic cards in favour of recycled PVC plastic ones across all its global locations by 2026. And finally, CPI is currently working with Visa to upcycle plastic from the ocean and give it a second life as a new credit card.
Enhanced security with fingerprint biometrics
Ever since credit card contactless technology became mainstream, banks have been searching for a way to make these transactions more secure. Right now, if you lose or get your contactless card stolen, a thief would be able to make payments for goods and services on your behalf. While the transaction limit for contactless transactions used to be relatively small (around £20), the COVID-19 pandemic pushed many governments into upping the limit (it is now set to be £100 from October 2021). Evidently with a rise like this, thieves have more to gain if they find or steal your contactless credit cards.
However, this weak security point is being addressed by credit card makers who have come up with a solution – biometric credit cards. These cards function exactly as a regular credit card but they also contain a small electronic fingerprint reader. When you want to pay for goods and services using contactless, all you need to do is place your finger on the fingerprint reader and confirm you are the authorised card holder, this verifies the transaction. What’s more, with a biometric credit card, contactless transaction limits no longer exist as the chance of a thief using the card to commit fraud is so unlikely.
Customers of Credit Agricole, BNP Paribas, BBVA Mexico, and Zwipe already offer their customers the option to have a biometric card, with many more banks expected to follow.
Are you excited about these new changes? Which one is your favourite? Let us know in the comments section. And, if you have any questions or other technology queries, please tweet us at @techtroublesho1.