A downgraded transaction means that the transaction does not support reading the magnetic stripe for transaction.

Downgrade transactions are accompanied by the emergence of chip-magnetic stripe composite cards, and the upgrading of acceptance equipment requires a process. Composite cards that could have been used for more secure chip transactions, but because POS machines and other acceptance terminals do not support chip cards For reasons such as the transaction or the chip may be damaged and cannot be read, the next best option is to use magnetic strips to complete financial transactions. This process is a downgrade transaction.

1. A card with both an IC chip and a magnetic stripe is called a composite card.

2. A chip card does not use a chip but uses a magnetic strip for transactions, which is called a downgrade transaction.

3. It prompts that the transaction cannot be downgraded, indicating that the transaction can only be completed using the IC chip and the magnetic strip cannot be read.

Extended information

Downgrade transactions are always excessive, so on June 13, 2016, the central bank issued an urgent document "Notice of the People's Bank of China on Further Strengthening Bank Card Risk Management". The notice stipulates that from May 1, 2017, magnetic stripe transactions for chip-magnetic stripe composite cards will be completely closed.

Magnetic stripe cards have been widely used in bank cards. Magnetic stripe cards often have a magnetic stripe on the back of the card. When we usually use bank cards to make purchases, we use the recording head of the card swipe machine to read the magnetic stripe card. The process by which the magnetic strip is then re-magnetized. The advantages of magnetic stripe cards are convenient data reading and writing and low cost; the disadvantages of magnetic stripe cards are that they are easy to wear, easily interfered by other magnetic fields, and have poor security.

There are three pieces of information on the credit card that must be protected: card number, expiration date, and CVV code. These three pieces of information are related to the security of your credit card, especially the CVV code, which is as important as your password. If someone knows the above three information of your credit card, they can use it to steal your credit card even if they don’t have the card.

Baidu Encyclopedia--Downgrade Transactions

ifeng.com--Changes in the Payment Industry: Financial IC Card Downgrade Transactions will be Completely Closed from May 1st