Since 1970, most credit card information has been stored in the magnetic strips found on the back of the cards. These strips convey the customer’s information to the bank that issued the card, which can then accept or decline the transaction, depending on the availability of funds. This magnetic strip changed the way the world did business last century, leading IBM to include it as one of the top 100 contributions to society.
The magnetic strip is nearing the end of its reign. You have likely already started to see the new EMV chip cards (EMV stands for Eurocard, Mastercard and Visa, the three companies responsible for its development), which are equipped with a smart chip and are becoming known as the smart way to do business.
“The chip makes the card nearly impossible to counterfeit,” says Gayle McFarland, Assistant Vice President, Electronic Services Officer. “Magnetic strips are much more susceptible to fraud.” Every time you make a purchase with your chip card, the chip creates a unique transaction code that can’t be used again. This means that a hacker trying to steal information from one specific purchase won’t be able to use that information—the card will be denied.
Mascoma Savings Bank will begin issuing new EMV chip cards in January of 2016. By the end of 2016, all cards will have been reissued with this new technology. As the United States continues its transition to EMV chip cards, many cards will also have a magnetic strip that can be used if a business does not have an EMV-compliant terminal. As some terminals can read a card either way, remember that you are safer from fraud when you use the EMV chip reader than if you swipe.
“At Mascoma Savings Bank, we take security very seriously,” says McFarland..