An MST (Magnetic Secure Transmission) transaction is a type of contactless mobile payment that emulates the magnetic stripe of a traditional credit or debit card. In simpler terms, it allows your smartphone or smartwatch to make payments at older point-of-sale (POS) terminals that only read magnetic stripes, as well as newer chip card (EMV) and NFC-enabled terminals.
How MST Transactions Work
MST technology works by generating a changing magnetic field that mimics the signal produced when a traditional card is swiped through a magnetic stripe reader. This allows devices equipped with MST to communicate payment information to the terminal wirelessly.
- Magnetic Field Generation: The device's MST transmitter creates a magnetic field that the POS terminal's magnetic stripe reader can detect.
- Data Transmission: The generated magnetic field contains the payment card details (card number, expiration date, etc.) encrypted for security.
- Terminal Compatibility: Because MST emulates a physical card swipe, it's compatible with a wider range of POS terminals, including older ones that haven't been upgraded to support NFC (Near Field Communication) or chip card payments.
Key Advantages of MST
- Broader Acceptance: Compared to NFC, MST offers wider acceptance, especially in areas where older magnetic stripe terminals are still prevalent.
- Convenience: Allows for contactless payments using your mobile device, eliminating the need to carry physical cards.
- Security: Transactions are tokenized, meaning your actual card details are replaced with a unique digital identifier, protecting your information from fraud.
Example Scenario
Imagine you're at a local coffee shop that hasn't upgraded to a modern NFC-enabled terminal. With a phone or watch equipped with MST, you can simply hold your device near the magnetic stripe reader, and the transaction will process as if you had swiped a physical card.
MST vs. NFC
While both MST and NFC are contactless payment technologies, they differ in their underlying technology and compatibility:
| Feature | MST (Magnetic Secure Transmission) | NFC (Near Field Communication) |
|---|---|---|
| Technology | Emulates magnetic stripe of a card | Uses radio-frequency identification (RFID) technology |
| Compatibility | Works with most magnetic stripe readers and NFC terminals | Requires NFC-enabled terminals |
| Range | Slightly longer range than NFC | Short range (typically a few centimeters) |
| Security | Uses tokenization to protect card data | Also uses tokenization and other security measures |
MST offered a significant advantage in its early days because it worked with the existing infrastructure of magnetic stripe readers. However, with the increasing adoption of NFC-enabled terminals and chip card payments, the need for MST has gradually diminished.
