The Question title is misleading but only because I did not understand what was happening after some investigation I was able to solve the problem. I hope this answer might come in Handy for someone someday though its a pretty isolated problem.
So I found that the MagTek reader reads the credit card data to the field and then Sends a "Enter" button afterwards.
And the Program I am currently working with has an option where when a Enter Key is pushed it will instead send a Tab so that a user can get to the next fields by the enter key.
So the program was intercepting the MagTek reader initiated enter key and replacing it with a tab which interfered with the payment process.