About long life and imminent death of magnetic stripe cards
This fruit of love of the aviation and banking industry has experienced more than half a century. However, its end is near.
In 1967, the airlines used Boeing 727 and Douglas DC-8, flights were something special, and carriers earned a lot of money. However, a problem appeared on the horizon. Airlines were going to buy the first wide-body Boeing 747 and Douglas DC-10 aircraft, which would significantly increase passenger traffic and, consequently, the number of passengers arriving at the same time to check-in counters. In order to prevent the mess that could have arisen because of this, the airlines were forced to look for a way that would speed up the process of selling tickets and checking in passengers.
Photo: Levi Brown; Stylist-Propsman: Ariana Salvato
In turn, the banks also encountered difficulties. The popularity of bank credit cards was on the rise, and sellers simply buried in the papers. Every time the buyer took any goods on credit, the seller had to fill out a special form to register the purchase, and call the bank to authorize the payment. And the presence of convenience stores around the clock and even the growing popularity of nightly television programs have led to the fact that people are not enough official hours of banks, and they began to expect from them that their services were available in the evenings and even on weekends.
')
The only way to solve this problem of banks and airlines (except for hiring crowds of clerks) was to arrange customer self-service using computers. For banks, this meant using ATMs, and for airlines, using similar machines that could track information about booked tickets and issue boarding passes. It was easy to design a car that would give out money or tickets. But in order for people to trust such machines, engineers needed to suggest a way by which users could easily, quickly and safely identify themselves.
In this way, there were cards with a magnetic strip. Developed by IBM and mass-produced in the seventies, having gained world popularity in the eighties and nineties, they became almost ubiquitous. However, over the years of their existence, they had to overcome many obstacles, especially in North America, before they became one of the most successful technologies of the past half century. Think about these numbers: in 2011 alone, 6 billion bank cards, as well as travel tickets and other magnetic stripe information carriers, all over the world, passed through the readers about 50 billion times.
The greatest difficulties for magnetic stripe cards arose in the mid-eighties, when smart card technology appeared. Smart cards are very similar in appearance to magnetic stripe cards, most of them still have such a band, for use where smart card readers are not available, but a microprocessor chip is built into the plastic of their case. This chip monitors the operation of the card, which means that for authorization and execution of about 85 percent of transactions, only the information stored directly in the chip itself is sufficient, and communication with the network is not required, and this is a big plus for those places where the connection is unstable. Such a card may also contain a hidden personal identification number (PIN), and thus the card can verify the PIN entered by the user without disclosing this code to the reading equipment, which is a major security improvement. In Europe and in some other regions outside North America, microchip-based smart cards have almost completely supplanted magnetic stripe cards, but the latter are still quite popular in the United States and Canada.
But the end of the magnetic stripe cards is not far off. Appearing payment schemes using smartphones and Near Field Communication technology are gaining popularity, and are likely, in the end, to be replaced by honorable credit cards, even in North America. And since we are on the verge of a new era, an era of high-tech transactions, it’s time to praise the unsung engineers who were behind the creation of the technology that was so incredibly successful.
Fast forward back to 1967, at a time when the banking and aviation industries were struggling with a way to serve customers that would allow them to do without a radical increase in the number of customer support staff.
Here came the Blue Giant to the rescue. Several hundred developers from IBM’s advanced systems division in Los Gatos (California) and Armonk (New York) were faced with the task of creating new computer applications that would contribute to an increase in computer sales. They proposed to use cards that resemble existing payment punch cards with the machine-readable information on them. The researchers decided that they should use a unified machine-readable data scheme, both for the needs of the airlines and for the needs of the banks, because in this case the customers would no longer need to carry several different cards with them, and IBM would not have to produce several types of equipment manufacturing cards.
Photo: Marcus Lindstrom / iStockphoto
IBM did all the work, not demanding extra money for it. They didn’t even patent their card with machine readable information. On the contrary, they allowed everyone to use this technology free of charge, based on the fact that the more operations will be performed using computer-readable storage media, the more computers will be sold to work with them. The strategy worked better than any expectations: By 1990, for every dollar IBM spent on developing magnetic stripe cards, one and a half thousand dollars came from the sale of computers.
The engineers at IBM knew that there would be very little space on the card where information could be written. The size of payment cards is 5.4 by 8.6 centimeters. On the front side of the card was a bank logo, and this could not be changed. Therefore, the machine-readable area had to share space on the back of the card, along with information about the bank, the issuer company, and the signature line. The engineers concluded that they could count on a strip along the card, about a centimeter wide. Thus, it was easy to determine the size of the machine-readable area: 1 to 8.6 centimeters. But how to encode information on this strip?
IBM reviewed and discarded the idea of ​​using barcodes and punched paper tapes (an idea that Citibank would later use for its short-lived “magic middle” card ). As a result, IBM stopped on magnetic media used since World War II for storing audio recordings, and later finding use in the computer industry, as disk drives. Only the use of such technology could give engineers the data recording density sufficient to enable them to squeeze all the necessary information into the strip that was at their disposal. The information contained both literal data, such as name and address, necessary for airlines in order for them to identify customers using their databases, and numerical data, such as account number and bank number, which were necessary for banks.
IBM proved the correctness of their chosen concept by creating the world's first credit card with magnetic media. It was a piece of cardboard with a magnetic strip glued to it literally with adhesive tape (see photo “A card with a magnetic strip version 1.0” ). Then came the real problem: how to create a card strong enough so that it could withstand daily careless handling, and which could be produced quickly and inexpensively.
In order to glue the magnetic carrier, a piece of iron oxide, to the back of the card, the developers needed a binder that would melt when heated and bound this piece of iron oxide to the plastic card. Fortunately, the binder used to attach the signature line came up also for iron oxide. However, more than two years passed before a machine was created that could stamp magnetic stripes at high speed and a sufficient level of reliability. However, the price of issuing one card was two dollars, which is roughly equal to eleven today. This price was too high, and it took an entire decade until 1980 to reduce it to an acceptable five cents. Today, issuing one card costs two to three cents.
In addition, there was another problem with magnetic media. In the case of a card through a skimmer, attackers could make a magnetic copy from the card, and then transfer the received information to a blank card. So the developers needed to find a way to ensure the security of the cards, despite this vulnerability.
Some researchers believed that this problem was intractable, and insisted that the very idea of ​​using magnetic cards should be left behind. However, others argued that large databases, whose widespread use had only just begun, have sufficient capabilities to track and analyze operations, and can compensate for the vulnerability of the cards themselves. The fact that IBM saw the sale of database systems as one of its main areas of commercial activity did not in the least interfere.
Here is how it works. When you or the cashier swipe a card through a reader, it reads information encoded on a magnetic strip, with which you can be identified. Then this terminal, using either a dedicated line or, in the case of small shops, dial-up, sends information about you, and how much you want to spend, to the bank that collects data about your card payments. The bank then sends this information to the issuer issuing the card using the issuer's network, for example, using Visa. If the issuer has determined that you have not exceeded your credit limit, it will send a confirmation message to the bank, which in turn will forward it to the store. Usually this operation takes only a couple of seconds. However, the credit card issuer has not yet completed your
At the checkout: Magnetic card readers appeared in stores in the early 70s. This shoe store customer uses her magnetic stripe card for a purchase in 1971. Photo: IBM Corp.
transaction. Even after the transaction has been authorized and you left the store with the purchase, the issuer’s software that checks for fraud checks your transaction and looks to see if it matches your usual shopping style, and notes the transaction in case of inconsistency.
After the developers chose to use magnetic strip technology, they needed to determine exactly how the information will be placed on each card. At first they were going to place all the information - digital codes for ATMs and alphanumeric for airlines in a single set of data, and allow the reader to choose from the required data itself. But then they had a better idea, namely, to use a multi-track recording, a relatively new technology that would allow them to encode two different data sets on a single magnetic strip. Using such a scheme allowed IBM to give way to others, too; every industry could now, if necessary, create its own standards for its tracks. Moreover, the tape even left room for the third track, and with it the savings and loan companies were able to record information about transactions directly on the card itself.
Each of the three tracks has a width of 0.28 cm. and separated from the others by a small space. The first track is dedicated to the aviation industry, and among other data includes the account number (19 digits), the name (26 alphanumeric characters) and other data (up to 12 digits). The second track is dedicated for banks, contains the number of the main account (up to 19 digits) and various other information (up to 12 digits). Exactly the same format and is still used.
In January 1970, American Express launched 250,000 magnetic stripe cards for its Chicago customers and installed self-service kiosks for ticket purchases at the American Airlines counter at Chicago O'Hare International Airport. The cardholder could choose whether to take his tickets and boarding passes at the kiosk or from a human servant. Card holders were bursting into kiosks. In fact, even United Airlines customers went to American Airlines racks located a quarter of a mile away, at the other end of the terminal, to use the kiosks.
The technology of magnetic stripe cards soon became the ubiquitous mechanism for conducting transactions. The solid position of such cards in North America was the result of both a happy occasion and a good design. In the mid-eighties, the largest credit card companies spent tens of millions on upgrading their network infrastructures. Shortly thereafter, smart card technology became available, however, the transition to the use of this technology would have led to the fact that most of these investments would become useless.
Magnetic Stripe Card Version 1.0: Scotch tape, a strip of magnetic tape, and a piece of cardboard became the world's first magnetic stripe card (see above). Its author Jerome Svigals still carries this prototype in his wallet. Photo by Jerome Svigals
However, at the moment, these costs have mostly paid off, and the problems related to security are growing. Therefore, companies operating in this area are no longer so committed to using magnetic stripe cards, and smart cards are slowly trickling into North American wallets. However, smart cards will not long reign in North America, as mobile phones and transactions made with their help will soon override them.
Today, all new transaction processing devices installed at sales outlets can also exchange data with smartphones using a set of wireless communication standards called the Near Field Communication standard. In North America and Asia, this opportunity is not so often used, but it is becoming more and more accessible. In the meantime, some airlines have already installed reading devices that save passengers from having to use self-service kiosks. Now it’s enough for them to simply present the electronic boarding pass displayed on the smartphone screen.
Ironically, one of the recent technical developments, a small plastic nozzle called Square , which turns smartphones into card readers and allows anyone to accept payments made using credit cards, can, oddly enough, slow down the pace with which the magnetic card stripe losing ground in favor of the transaction technology using smartphones. Square makes it easier for people to continue using magnetic stripe cards than to go on to work with new systems.
Over the next few years, magnetic stripe cards will finally disappear from the scene. However, their legacy continues to exist. The initial information standards, how the data were physically located on the magnetic strip, survived all changes of data carriers, the migration from magnetic stripe cards to smart cards, and from them to smartphones. And just as many of us have completely forgotten the origin of the QWERTY keyboard layout, on which we knock so many hours every day, that when we soon begin to photograph checks in order to deposit them into the bank, when we wave our phones at scanners, for In order to pay for coffee, or when we slip through a turnstile in public transport, without even taking out a mobile phone from our pocket, and the fare is automatically deducted from our account, we will also completely forget that it all started with a magnetic polo sa
about the author
In 1974, in the journal IEEE Spectrum, the theme of the issue was an article announcing the birth of magnetic stripe cards, which became one of the most successful inventions ever invented. In the issue of Spectrum magazine published 38 years later, in June 2012, this article was published, predicting a quick death of magnetic stripe cards. Amazingly, the author of both was the same person, Jerome Svigals. This is probably the first time in world history when the same person, in the same magazine, announces first the appearance and then the death of such a weighty technology. IBM , . 1974 IBM , , Spectrum, IBM . . . , . « »,- . « , , . ».
In 1967, the airlines used Boeing 727 and Douglas DC-8, flights were something special, and carriers earned a lot of money. However, a problem appeared on the horizon. Airlines were going to buy the first wide-body Boeing 747 and Douglas DC-10 aircraft, which would significantly increase passenger traffic and, consequently, the number of passengers arriving at the same time to check-in counters. In order to prevent the mess that could have arisen because of this, the airlines were forced to look for a way that would speed up the process of selling tickets and checking in passengers.Photo: Levi Brown; Stylist-Propsman: Ariana Salvato
In turn, the banks also encountered difficulties. The popularity of bank credit cards was on the rise, and sellers simply buried in the papers. Every time the buyer took any goods on credit, the seller had to fill out a special form to register the purchase, and call the bank to authorize the payment. And the presence of convenience stores around the clock and even the growing popularity of nightly television programs have led to the fact that people are not enough official hours of banks, and they began to expect from them that their services were available in the evenings and even on weekends.
')
The only way to solve this problem of banks and airlines (except for hiring crowds of clerks) was to arrange customer self-service using computers. For banks, this meant using ATMs, and for airlines, using similar machines that could track information about booked tickets and issue boarding passes. It was easy to design a car that would give out money or tickets. But in order for people to trust such machines, engineers needed to suggest a way by which users could easily, quickly and safely identify themselves.
In this way, there were cards with a magnetic strip. Developed by IBM and mass-produced in the seventies, having gained world popularity in the eighties and nineties, they became almost ubiquitous. However, over the years of their existence, they had to overcome many obstacles, especially in North America, before they became one of the most successful technologies of the past half century. Think about these numbers: in 2011 alone, 6 billion bank cards, as well as travel tickets and other magnetic stripe information carriers, all over the world, passed through the readers about 50 billion times.
The greatest difficulties for magnetic stripe cards arose in the mid-eighties, when smart card technology appeared. Smart cards are very similar in appearance to magnetic stripe cards, most of them still have such a band, for use where smart card readers are not available, but a microprocessor chip is built into the plastic of their case. This chip monitors the operation of the card, which means that for authorization and execution of about 85 percent of transactions, only the information stored directly in the chip itself is sufficient, and communication with the network is not required, and this is a big plus for those places where the connection is unstable. Such a card may also contain a hidden personal identification number (PIN), and thus the card can verify the PIN entered by the user without disclosing this code to the reading equipment, which is a major security improvement. In Europe and in some other regions outside North America, microchip-based smart cards have almost completely supplanted magnetic stripe cards, but the latter are still quite popular in the United States and Canada.
But the end of the magnetic stripe cards is not far off. Appearing payment schemes using smartphones and Near Field Communication technology are gaining popularity, and are likely, in the end, to be replaced by honorable credit cards, even in North America. And since we are on the verge of a new era, an era of high-tech transactions, it’s time to praise the unsung engineers who were behind the creation of the technology that was so incredibly successful.
Fast forward back to 1967, at a time when the banking and aviation industries were struggling with a way to serve customers that would allow them to do without a radical increase in the number of customer support staff.
Here came the Blue Giant to the rescue. Several hundred developers from IBM’s advanced systems division in Los Gatos (California) and Armonk (New York) were faced with the task of creating new computer applications that would contribute to an increase in computer sales. They proposed to use cards that resemble existing payment punch cards with the machine-readable information on them. The researchers decided that they should use a unified machine-readable data scheme, both for the needs of the airlines and for the needs of the banks, because in this case the customers would no longer need to carry several different cards with them, and IBM would not have to produce several types of equipment manufacturing cards.
Photo: Marcus Lindstrom / iStockphoto
IBM did all the work, not demanding extra money for it. They didn’t even patent their card with machine readable information. On the contrary, they allowed everyone to use this technology free of charge, based on the fact that the more operations will be performed using computer-readable storage media, the more computers will be sold to work with them. The strategy worked better than any expectations: By 1990, for every dollar IBM spent on developing magnetic stripe cards, one and a half thousand dollars came from the sale of computers.
The engineers at IBM knew that there would be very little space on the card where information could be written. The size of payment cards is 5.4 by 8.6 centimeters. On the front side of the card was a bank logo, and this could not be changed. Therefore, the machine-readable area had to share space on the back of the card, along with information about the bank, the issuer company, and the signature line. The engineers concluded that they could count on a strip along the card, about a centimeter wide. Thus, it was easy to determine the size of the machine-readable area: 1 to 8.6 centimeters. But how to encode information on this strip?
IBM reviewed and discarded the idea of ​​using barcodes and punched paper tapes (an idea that Citibank would later use for its short-lived “magic middle” card ). As a result, IBM stopped on magnetic media used since World War II for storing audio recordings, and later finding use in the computer industry, as disk drives. Only the use of such technology could give engineers the data recording density sufficient to enable them to squeeze all the necessary information into the strip that was at their disposal. The information contained both literal data, such as name and address, necessary for airlines in order for them to identify customers using their databases, and numerical data, such as account number and bank number, which were necessary for banks.
IBM proved the correctness of their chosen concept by creating the world's first credit card with magnetic media. It was a piece of cardboard with a magnetic strip glued to it literally with adhesive tape (see photo “A card with a magnetic strip version 1.0” ). Then came the real problem: how to create a card strong enough so that it could withstand daily careless handling, and which could be produced quickly and inexpensively.
In order to glue the magnetic carrier, a piece of iron oxide, to the back of the card, the developers needed a binder that would melt when heated and bound this piece of iron oxide to the plastic card. Fortunately, the binder used to attach the signature line came up also for iron oxide. However, more than two years passed before a machine was created that could stamp magnetic stripes at high speed and a sufficient level of reliability. However, the price of issuing one card was two dollars, which is roughly equal to eleven today. This price was too high, and it took an entire decade until 1980 to reduce it to an acceptable five cents. Today, issuing one card costs two to three cents.
In addition, there was another problem with magnetic media. In the case of a card through a skimmer, attackers could make a magnetic copy from the card, and then transfer the received information to a blank card. So the developers needed to find a way to ensure the security of the cards, despite this vulnerability.
Some researchers believed that this problem was intractable, and insisted that the very idea of ​​using magnetic cards should be left behind. However, others argued that large databases, whose widespread use had only just begun, have sufficient capabilities to track and analyze operations, and can compensate for the vulnerability of the cards themselves. The fact that IBM saw the sale of database systems as one of its main areas of commercial activity did not in the least interfere.
Here is how it works. When you or the cashier swipe a card through a reader, it reads information encoded on a magnetic strip, with which you can be identified. Then this terminal, using either a dedicated line or, in the case of small shops, dial-up, sends information about you, and how much you want to spend, to the bank that collects data about your card payments. The bank then sends this information to the issuer issuing the card using the issuer's network, for example, using Visa. If the issuer has determined that you have not exceeded your credit limit, it will send a confirmation message to the bank, which in turn will forward it to the store. Usually this operation takes only a couple of seconds. However, the credit card issuer has not yet completed your
At the checkout: Magnetic card readers appeared in stores in the early 70s. This shoe store customer uses her magnetic stripe card for a purchase in 1971. Photo: IBM Corp.
transaction. Even after the transaction has been authorized and you left the store with the purchase, the issuer’s software that checks for fraud checks your transaction and looks to see if it matches your usual shopping style, and notes the transaction in case of inconsistency.
After the developers chose to use magnetic strip technology, they needed to determine exactly how the information will be placed on each card. At first they were going to place all the information - digital codes for ATMs and alphanumeric for airlines in a single set of data, and allow the reader to choose from the required data itself. But then they had a better idea, namely, to use a multi-track recording, a relatively new technology that would allow them to encode two different data sets on a single magnetic strip. Using such a scheme allowed IBM to give way to others, too; every industry could now, if necessary, create its own standards for its tracks. Moreover, the tape even left room for the third track, and with it the savings and loan companies were able to record information about transactions directly on the card itself.
Each of the three tracks has a width of 0.28 cm. and separated from the others by a small space. The first track is dedicated to the aviation industry, and among other data includes the account number (19 digits), the name (26 alphanumeric characters) and other data (up to 12 digits). The second track is dedicated for banks, contains the number of the main account (up to 19 digits) and various other information (up to 12 digits). Exactly the same format and is still used.
In January 1970, American Express launched 250,000 magnetic stripe cards for its Chicago customers and installed self-service kiosks for ticket purchases at the American Airlines counter at Chicago O'Hare International Airport. The cardholder could choose whether to take his tickets and boarding passes at the kiosk or from a human servant. Card holders were bursting into kiosks. In fact, even United Airlines customers went to American Airlines racks located a quarter of a mile away, at the other end of the terminal, to use the kiosks.
The technology of magnetic stripe cards soon became the ubiquitous mechanism for conducting transactions. The solid position of such cards in North America was the result of both a happy occasion and a good design. In the mid-eighties, the largest credit card companies spent tens of millions on upgrading their network infrastructures. Shortly thereafter, smart card technology became available, however, the transition to the use of this technology would have led to the fact that most of these investments would become useless.
Magnetic Stripe Card Version 1.0: Scotch tape, a strip of magnetic tape, and a piece of cardboard became the world's first magnetic stripe card (see above). Its author Jerome Svigals still carries this prototype in his wallet. Photo by Jerome Svigals
However, at the moment, these costs have mostly paid off, and the problems related to security are growing. Therefore, companies operating in this area are no longer so committed to using magnetic stripe cards, and smart cards are slowly trickling into North American wallets. However, smart cards will not long reign in North America, as mobile phones and transactions made with their help will soon override them.
Today, all new transaction processing devices installed at sales outlets can also exchange data with smartphones using a set of wireless communication standards called the Near Field Communication standard. In North America and Asia, this opportunity is not so often used, but it is becoming more and more accessible. In the meantime, some airlines have already installed reading devices that save passengers from having to use self-service kiosks. Now it’s enough for them to simply present the electronic boarding pass displayed on the smartphone screen.
Ironically, one of the recent technical developments, a small plastic nozzle called Square , which turns smartphones into card readers and allows anyone to accept payments made using credit cards, can, oddly enough, slow down the pace with which the magnetic card stripe losing ground in favor of the transaction technology using smartphones. Square makes it easier for people to continue using magnetic stripe cards than to go on to work with new systems.
Over the next few years, magnetic stripe cards will finally disappear from the scene. However, their legacy continues to exist. The initial information standards, how the data were physically located on the magnetic strip, survived all changes of data carriers, the migration from magnetic stripe cards to smart cards, and from them to smartphones. And just as many of us have completely forgotten the origin of the QWERTY keyboard layout, on which we knock so many hours every day, that when we soon begin to photograph checks in order to deposit them into the bank, when we wave our phones at scanners, for In order to pay for coffee, or when we slip through a turnstile in public transport, without even taking out a mobile phone from our pocket, and the fare is automatically deducted from our account, we will also completely forget that it all started with a magnetic polo sa
about the author
In 1974, in the journal IEEE Spectrum, the theme of the issue was an article announcing the birth of magnetic stripe cards, which became one of the most successful inventions ever invented. In the issue of Spectrum magazine published 38 years later, in June 2012, this article was published, predicting a quick death of magnetic stripe cards. Amazingly, the author of both was the same person, Jerome Svigals. This is probably the first time in world history when the same person, in the same magazine, announces first the appearance and then the death of such a weighty technology. IBM , . 1974 IBM , , Spectrum, IBM . . . , . « »,- . « , , . ».
Source: https://habr.com/ru/post/168985/
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