What is the difference between magnetic stripe and chip card?

A image of smart chip card and stripe card

Magnetic stripe cards and chip cards are both used for payment and identification purposes, but they have significant differences in terms of technology, security, and functionality.

Magnetic Stripe Cards


  • Contain a strip of magnetic material on the back of the card.
  • The stripe stores data in three tracks of magnetic particles.

Data Storage

  • Data is encoded in the magnetic stripe and can be read by swiping the card through a magnetic card reader.
  • Typically stores static information, such as the card number, expiration date, and security code.


  • Relatively low security.
  • Data is easy to copy or clone (skimming).
  • Susceptible to wear and tear, which can lead to the card becoming unreadable.
  • Usage:
    • Commonly used in older payment systems.
    • Still prevalent in regions with less advanced payment infrastructure.

Chip Cards (EMV Cards)


    • Contain a microprocessor chip embedded in the card.
    • The chip interfaces with the card reader through contact or contactless (RFID/NFC) means.

Data Storage:

  • Stores dynamic data, which changes with each transaction.
  • Can perform complex processing and cryptographic functions.


  • Higher security compared to magnetic stripe cards.
  • Uses encryption and unique transaction codes, making it extremely difficult to clone.
  • Offers protection against skimming and other forms of fraud.


  • Widely adopted in modern payment systems globally.
  • Supports various transaction methods, including contact and contactless (tap-and-go) payments.
    Often used in conjunction with PIN (Personal Identification Number) for additional security.


  • Magnetic Stripe Cards: Utilize a magnetic stripe to store static data, are easy to clone, and have lower security.
  • Chip Cards: Utilize an embedded microchip to store dynamic data, provide higher security with encryption.

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