But do these moves really mark the beginning of the end for the magnetic stripe?
FORBES: Have We Seen The Last Of Credit Cards As We Know Them?
Know about those three-digit codes on the back of your card, imprinted next to the magnetic stripe?
Many Seibu customers use a loyalty card with a magnetic stripe to earn rewards with each purchase.
In skimming, information is stolen from a card's magnetic stripe and then used to make a counterfeit card.
The cards have a programmable magnetic stripe that gives customers more functions than your standard piece of plastic.
The best design for a mobile credit-card reader is to embed the encryption function into the actual magnetic stripe hardware.
To understand the present and predict the future, we must look to the past, specifically previous attempts to replace magnetic stripe credit cards.
FORBES: Have We Seen The Last Of Credit Cards As We Know Them?
After burning the stolen account data onto a blank magnetic stripe card, the criminal is then able to use this new PIN at any ATM.
The most common type of counterfeiting is called skimming, where the data on a card's magnetic stripe is electronically copied and used to make an illegal copy of a genuine card.
Since then, most European nations as well as Japan and Canada have adopted this so-called EMV international credit card standard and abandoned magnetic stripe credit cards for chip-and-pin cards in the process.
FORBES: Have We Seen The Last Of Credit Cards As We Know Them?
Data is loaded onto any plastic card with a magnetic stripe an old hotel key card or an expired credit card would do as long as it carried the account data and correct access codes.
Others loaded that data onto any plastic card with a magnetic stripe an old hotel key card or an expired credit card worked fine as long as it carried the account data and correct access codes.
The 16-digit account number stored in your card's magnetic stripe zooms across a leased phone line to the merchant's bank, zips under the Pacific to Visa's data center outside Tokyo and rides the Visa network to the data center of your issuing bank in Delaware.
"Because it's contact-less there's a perception people can grab it from thin air, but it's actually a more sophisticated technology than credit cards with a magnetic stripe, making it more difficult to steal a consumer's payment information, " said Nick Holland, a mobile-transactions analyst at Yankee Group.
Security concerns have led many places in Europe to accept only chip-and-pin credit cards, which causes trouble for travellers with magnetic-stripe cards.
" Unlike the West, says Catherine Allen, founder of U.S.-based Smart Card Forum, the region "does not have the embedded infrastructure of magnetic-stripe cards to get rid of.
Today they can handle 80 times more information than the most advanced magnetic-stripe plastic, which usually contain little more than a name, an account number and a secret ID code.
Able to carry many times more information than an ordinary magnetic-stripe card, one smart card can be used for a variety of transactions that currently require a variety of cards.
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