Magnetic stripe technology records magnetic data that is generally encoded on the front or back of a paper or plastic card similar to that of an audio or videotape. A magnetic stripe reader decodes the magnetic information on the card and translates it into ASCII characters. The magnetic stripe found on the back of credit cards and ID badges have a possibility of up to three "tracks" of data - Track 1, Track 2, and Tack 3. Each track has a different encoded format. Track 1 contains up to 79 alphanumeric characters while Track 2 and 3 contain only numeric characters. Track 2 contains 40 numeric characters, and track 3 contains 105 numeric characters. The banking industry use Tracks 1 and 2. Regulations required the customer's name to be encoded on the magnetic stripe along with the account number. In addition, the card holder number and expiration date are usually encoded. ID badges, on the other hand, use Track 2.
There are two types of magnetic encoding schemes: low-coercivity and high-coercivity. In regards to magnetic stripe technology, coercivity is the opposing magnetic intensity that must be applied to a material to remove the residual magnetism when it has been magnetized to saturation. In other words, a card encoded with high-coercivity has a less of a chance of accidentally being erased with, for example, a magnetized screw driver or magnetic clasp than a low-coercivity encoded card. Most card systems support both types of media, but high-coercivity is generally recommended especially for creating ID badges.
The best known applications for magnetic stripe are credit cards, time and attendance, personnel identification, and banking cards. Standards have been adopted for data densities, encoding methods, data content, recording qualities, and data formats. Magnetic stripe standards are mandatory in all financial systems, however, few standards exists for most other applications.