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Magnetic stripe technology allows data to be stored on a conventional plastic card by magnetically charging tiny bits within a magnetic stripe on one side of the card. This type of technology has largely built the new credit and debit card model, which has, to a certain extent, replaced cash transactions around the world.
Magnetic stripe is also known as magstripe.
By creating magnetic stripe cards with high durability and data integrity, banks and financial businesses have been able to implement all sorts of card-based transactions and procedures. Magnetic stripes are used in millions or billions of transactions per day and are also getting put into various types of identification cards. Specialized card readers can quickly take information off of a magnetic card, which is sent to a bank for authorization/authentication.
However, in recent years, a brand-new technology has emerged to rival magnetic card transactions. Experts refer to this as a "contactless payment system"; it involves situations where transaction information may be transmitted, not by a magnetic stripe, but by RFID signals sent from a small device chip. Apple, Inc., is pioneering contactless payment systems with its newest class of mobile devices, and others are likely to follow this trend, providing a future alternative to magnetic stripe cards.