MagStripe and Chip and Pin

Magstripe

A magnetic stripe card is a type of card capable of storing data by modifying the magnetism of tiny iron-based magnetic particles on a band of magnetic material on the card. The magnetic stripe, sometimes called a magstripe, is read by physical contact and swiping past a reading head

In most magnetic stripe cards, the magnetic stripe is contained in a plastic-like film and follows standard specifications that can typically be read by most point-of-sale hardware, which are simply generic general-purpose computers that can be programmed to perform specific tasks.

Examples of cards adhering to these standards include Prepaid Cards, ATM cards, bank cards (credit and debit cards including VISA and MasterCard), gift cards, loyalty cards, driver's licenses, telephone calling cards, membership cards, electronic benefit transfer cards (e.g. food stamps), and nearly any application in which value or secure information is not stored on the card itself.

Counterexamples of cards which intentionally ignore these standards include hotel keycards, most subway and bus cards, and some national prepaid calling cards (such as for the country of Cyprus) in which the balance is stored and maintained directly on the stripe and not retrieved from a remote database.

Chip & PIN

Chip and PIN is the name of a government-backed initiative in the United Kingdom to implement the EMV standard for secure payments. It represents the the new, more secure way to pay with credit, debit and Prepaid cards in the UK.

The main difference is that when you go to pay for anything with your chip and PIN card - in a shop, supermarket, hotel, restaurant or garage - you are asked to enter a four digit number instead of being asked to sign a receipt. This number is a Personal Identification Number, better known as a PIN. It works exactly the same way as when you tap in your number at an cash machine to withdraw money.

To find out more about Magnetic Stripe Cards, click here
To find out more about Chip & PIN, click here