Cardholders with cards that "don't work" may call for replacement cards, but oftentimes will simply stop using them. Card associations have focused on reducing unnecessary key entry at the point-of-transaction by providing educational materials to acquirers and merchants on the importance of fully functioning terminals and proper card swiping procedures. Other material has been provided to inform cardholders on the importance of protecting the magnetic stripe on their financial transaction cards.
Over the past two years, this multifaceted approach helped reduce acquirer key entry rates by 35 percent and issuer magnetic stripe failure rates by 23%. Despite these excellent results, 70% of magnetic stripe failure is caused by accidental erasure as the result of cardholder actions. While cardholder education helps, continually replacing damaged cards is an expensive proposition for card issuers.
Given these realities, and the imminent use of the more expensive integrated circuit chips in cards, issuers are recognizing the value of migrating to High Coercivity (HiCo) magnetic stripe material. HiCo media is significantly less susceptible to accidental erasure.
As a result, acquirers and merchants will experience more completed transactions with fewer lost sales, greater profitability and increased security. Issuers will see the incremental cost of HiCo magnetic stripe tape offset by a reduction in card replacement cost and customer service expense, as well as increased cardholder satisfaction and usage.
To ensure that the full benefits of HiCo magnetic tape are realized in a timely manner, all major card associations have approved the requirement that the magnetic stripe material for their card brands be High Coercivity magnetic tape.
Mag-Tek, Inc., an advanced card solutions provider, has information available on HiCo Magnetic Stripe Card Standards and has solutions available for encoding HiCo cards and activating HiCo cards for ATM usage. For more information on these solutions, Mag-Tek can be reached
at 888-624-8350 or at www.magtek.com.