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August 19, 2021 | Articles |

The End of the Mag Stripe: How Will it Affect Parking?

Close-up of the chip on a credit card

by Consultant Brian McGann, PCIP

The inevitable has now become official: Mastercard has announced the timetable for elimination of magnetic (mag) stripes from their credit and debit cards. Mastercard is second in market share only to VISA and it is reasonable to assume VISA and the other brands operating in the US (Discover and American Express) will follow along identically or similarly.

Referencing this recent article, “Swiping Left on Magnetic Stripes”, in most world markets (though not the US) mag stripes will not be required on cards starting in 2024, and all mag stripes throughout the world will be permanently eliminated by 2033.

In the US, the start of the transition begins a bit later, and concludes sooner: they’re optional on US-issued cards beginning in 2027, and completely replaced by 2029.

There are already problems with mag stripe-only acceptance. For one, the merchant automatically loses any chargeback dispute where the issued card had a chip available (i.e., nearly all of them). Any time someone is required to use their mag stipe to pay for parking (or anything else), they can rather easily have the charge removed from their bill. Two weeks of long-term parking at the airport, for instance, could be wiped out.

This is not the card companies being unreasonable. Any skimmed card can easily be copied, counterfeited, and fraudulently used where chips are not accepted. They are simply unwilling to accept that risk anymore since there are secure alternatives.

Walker recommends, designs, and specifies all new parking payment systems to accept card payments via chip card read (aka EMV), and oftentimes adds contactless (NFC) payment as well. To ensure strict compliance with PCI rules, we only recommend those systems that are 3rd-party validated as a PCI P2PE (Payment Card Industry Point to Point Encryption) solution.

A further benefit of PCI P2PE is relief from the onerous network security requirements of the PCI-DSS (PCI – Data Security Standard.)

And it’s not just garage systems – on-street meters and pay stations have also been served notice.

On August 12, 2021, the clock officially started ticking down on when mag-only payment systems will become unusable for an increasing number of cardholders. Walker staff is happy to offer our expertise on transitioning your systems.

About the Author

Brian McGann is one of only a handful of PCIP (Payment Card Industry Professional)-certified parking consultants working in the parking industry and a recognized expert in Parking Access and Revenue Control Systems (PARCS), Automated Parking Guidance Systems (APGS), Payment Card acceptance and data security. Brian has been a part of the Walker Consultants team since 2015, providing guidance from mixed-use developers, to airports, retail management, universities, hospitality, and municipalities. Contact Brian at BMcgann@walkerconsultants.com.

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