The Mental Floss website gives us the answer:
"There are tiny particles embedded in that magnetic strip on the back of your card. When the card is “swiped” through the reader, those particles are translated into binary code and transmits your card number (and other pertinent information) to the computer at the bank or wherever the merchant transmits the data for verification.
"As a card gets older and more worn, slight surface defects might occur in the magnetic strip that could corrupt the data stream. (The machine might read a zero where there isn’t one, and kick back your card as being invalid.)
"Increasing the distance of the card surface from the reader even a few thousandths of an inch often improves the signal-to-noise ratio, causing the electric eye to skip over the “ticks” in the magnetic strip. "
Now I can go back to sleep.