Magnetic stripe card payments utilize a small black strip located on the underside of a card called a magstripe that uses modified iron-based magnetic particles to communicate data and financial information between the card and a terminal. 

Though this is not as secure of a method as EMV chip card reading, magnetic stripe card payments are still prevalent and are superior to keypad transactions which carry enhanced risk and, therefore, enhanced fees. 

Magnetic card technology can also store necessary security functions. When used with a well-designed point-of-sale (POS) system, this information transmits relevant data to the card issuer to either approve or deny transactions.

How Do Magnetic Stripe Cards Work?

Magnetic stripe cards feature a magnetic strip of tape attached to a plastic card for card-present transactions. This magnetic strip includes three "tracks," all horizontally stacked across the length of the card, each of which holds distinct types and amounts of data.

Credit cards primarily use the first two tracks to store cardholder's information like the account number, name, expiration date, service code, and card verification code. Track three is rarely used, but it does store supplementary information such as PINs, country codes, currency units, the amount authorized, or account restrictions.

Today, magnetic stripe cards are still a prevalent form of payment and require dependable POS technology and business solutions to integrate fully into a merchant's infrastructure. 

Data One offers top-of-the-line card payment solutions, and our team of experts are ready to source the best solutions for your business. 

Speak to a Data One expert now. 

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