Card-Swiped Transaction

A card-swiped transaction is a payment method where a credit or debit card's magnetic stripe is physically swiped through a card reader. This action allows the magnetic stripe reader to capture the cardholder's account information encoded on the stripe. The data collected includes the card number, cardholder’s name, the card's expiration date, and the service code, which are essential for processing the payment.

This type of transaction is one of the traditional forms of card payments and requires the physical presence of both the card and the cardholder at the point of sale. Card-swiped transactions are common in retail settings where a merchant has a point-of-sale (POS) system equipped with a magnetic stripe reader.

While effective and widely used, the security of card-swiped transactions has been a concern due to the vulnerability of magnetic stripes to skimming and cloning. As a response, the payments industry has been moving toward more secure alternatives, such as EMV chip technology, which offers enhanced security features. Nonetheless, card-swiped transactions remain prevalent, especially in regions and settings where newer technologies have not yet been fully adopted.

Merchants processing these transactions are required to comply with the Payment Card Industry Data Security Standard (PCI DSS) to ensure that cardholder data is transmitted, processed, and stored securely to minimize the risk of fraud and data breaches.