EMV Chip Card vs Magnetic Stripe Card

When dealing with payment systems, you will probably come across terms like EMV and magnetic strip. However, not many people are familiar with these terms. It leaves a lot of questions when you look at it, but a little research will provide clarity. If you want to protect your business and ensure the security of your customers’ data, you will need to understand what Swipe and Smart card Payments are about.

Many people wonder what makes EMV chip cards better than magnetic ones. However, you can only truly decide if you understand what each payment system is and the effect of using them. It is essential that you know the difference between the two as their differences go beyond the way customers use these cards.

Magstripe Card Technology

Swipe cards are one of the oldest forms of credit card technology and have been in use for over 50 years. This payment system evolved from its traditional method of using plastic tape for magnetic recording of information. This was a technology used during World War II.

The magnetic cards we know today are often referred to as swipe cards. The stripe can be found at the back of the card, and it has magnetic particles that can transmit the information between the terminal and the strip. When users swipe their cards, a request for authorization is sent to the payment processor and then to the issuer. Once the approval is given, the transaction is completed. The magstripe is a static storage device, and it contains very confidential information about the holder’s account.

Benefits and Drawbacks of Using Magnetic Stripe Cards

There are some advantages and disadvantages of using swipe payment cards, and let’s evaluate whether the advantages outweigh the disadvantages.

EMV Chip Card Transactions in Details

Credit and debit cards commonly used today come under EMV. These ones use a microchip as opposed to a plastic stripe. The chip cards are managed by MasterCard, American Express, Visa, UnionPay, Discover, and JCB. The microchip uses a code, so it is practically impossible for fraudulent persons to get access to the owner’s information.

Even if there is a suspicion of fraud, the charges are easier to identify and isolate. The microchip does a better job of protecting card data, and since a unique code is generated for each transaction, it can’t be used again.

How Chip Cards Work: Pros and Cons

Let’s take a look at the pros and cons of using the microchip:

Chip Card vs Magnetic Strip: What Is Better for Business?

Over time, EMV chip technology have proven to be the best for payments. They are not vulnerable to fraud, and the card is encoded for each transaction. You would need to use a PIN or some signature to process payments. The Magnetic stripe card transactions, however, are not safe. Anyone using them will be exposing confidential data like the number, expiry date, country, and holder’s name. It will be very easy for criminals to obtain this information for malicious purposes.

Bottom Line

Choosing between EMV payments and Magstripes isn’t a tough decision to make at all. The difference is clear, and the EMV payments will win anytime. Being able to protect your customers from fraud is one way to keep them coming back. Magstripe may be much easier to process payments, but the risks outweigh the benefits. Even though they were the only available option in the past, it is a good thing we now have chip cards that address the flaws of Magstripe. EMV technology is the best solution for modern-day transactions. Safety trumps it all and the chip is a better option. If you haven’t migrated to chip or your business is not yet EMV-compliant, we recommend switching to EMV today and enjoy the benefits of using this payment method.