Magnetic Stripe Card Vs. Chip Card

A decade ago, if we had told someone they could book their plane and movie tickets online, pay bills online, or transfer money online, they would have laughed at the absurd idea.

Welcome to the world of digital payments!

According to a survey conducted by the U.S. bank, 47% of consumers prefer digital payment methods.

Thanks to the development of a cashless society, we are free from the hassle of carrying cash around and the horror of running out of money during shopping.

Magnetic Stripe Card

Magnetic stripe cards are the general swipe cards we use every day. There is an iron-based stripe installed at the back of the card that uses magnetic particles for communication of data between the receiving terminal and the strip.

Chip Card

The chip card or the EMV chip cards have a computer chip installed at the top part that allows them to form communication with the terminal. They allow the execution of a more secure transaction process by using tokenization.

Magnetic Stripe Card or EMV?

The answer depends on the situation. Here are a few differences that would help you decide when to use each of them:

  • If you need your card for a MOTO (Mail Order Telephone Order) transaction, there is no difference between the two. You can use any of those cards and can obtain the required result.
  • If you require a contactless transaction where you only need to tap the card when prompted instead of keeping it in the terminal for entire duration of the transaction, you should use chip cards. The contactless transaction technology is not offered by the magnetic stripe card.
  • Magnetic stripe card simply serves as a storage device that is read by the terminal. As soon as the card is read, the terminal performs signature capture, and PIN encryption function.
  • Each chip card transaction is characterized by a unique code preventing fraud and theft. Even if a theft of transaction data takes place, the data is only usable for one transaction.
  • If you need information about your remaining balance and account activity, EMV card is the better choice for you. Magnetic stripe is ‘static’ and does not contain information to your account balance.
  • If you are looking for a cost-effective transaction system or are a company that does not want to go through the costly process of upgrading your POS systems, you should continue with magnetic stripe cards.
  • While the EMV transaction process offers security, it extends the transaction time. If you need immediate transactions, magnetic stripe card are a better choice.


If you need services in digital payment industry, get in touch with us. UIC World offers a complete set of payment services including magnetic stripe readers/writers, EMV and Near Field Communication (NFC) platforms, MSR platforms and POS signature captures.

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