Magstripe timeclocks use magstripe cards similar to your credit card. The timeclock has an externally mounted magstripe reader. Simply slide the card through the magstripe reader (magstripe facing out) and the card ID will be read and displayed.
Proximity timeclocks are in-built in the timeclock, simply place the proximity card with-in 5cm of the timeclock and the card ID will be read and displayed.