Mastercard, Discover, AmEx and Visa ditching signatures
Not scribbling your name will speed checkout, won't affect card security
Writes trendy stories about credit cards.
You will not be routinely jotting your name on payment slips and checkout terminals much longer. Mastercard ditched the signature as of April 13, and Discover, American Express and Visa plan to drop the signature requirement at merchants later this month.
Here is a quick recap of the statements from the card networks:
- Mastercard, which announced in October that it would make signatures optional in April. Mastercard said in an April news release that merchants in the U.S. and Canada can forgo cardholder signatures for in-store credit and debit purchases, effective April 13.
Mastercard says more than 80 percent of the in-store transactions (also known as point-of-sale purchases) it processes now don’t need a signature.
- Discover said on Dec. 6, that it, too, would abandon the signature requirement. “With the rise in new payment security capabilities, like chip technology and tokenization, the time is right to remove this step from the checkout experience,” Discover’s Jasma Ghai, vice president of global products innovation, says.
- American Express announced Dec. 11 that it will drop the signature requirement globally in April.
- Visa said in a blog post Jan. 12 that it will make “the signature requirement optional for all EMV contact or contactless chip-enabled merchants in North America, beginning April 2018.”
What all of this means: The decades-old ritual for cardholders – scribbling something resembling your name on payment slips – is ending. Merchants will still have the option of asking for a signature, but the requirement will be history by the end of April.
Signatures are no longer necessary to fight fraud
“The payments landscape has evolved to the point where we can now eliminate this pain point for our merchants,” said Jaromir Divilek, executive vice president of global network business for American Express. “Our fraud capabilities have advanced so that signatures are no longer necessary to fight fraud.”
Jeanette Volpi, head of North America communications at Visa, said that more than three-fourths of Visa’s face-to-face transactions in North America don’t require signatures.
“Visa supports multiple technologies to bring speed, security and consumer convenience to the authentication and authorization process,” Volpi said in a statement.
Jack Jania, senior vice president of strategic alliances at Gemalto, “This is a good move for both consumers and merchants, as it will speed up the in-store purchase experience.”
'A costly yet feeble means of securing transactions'
Mastercard was the first to announce the no-signature move, and it was applauded by the retail industry and even Walmart, the nation’s largest retailer.
“Mastercard’s decision to end signature verification acknowledges what retailers have long argued, that signatures are a costly yet feeble means of securing transactions,” says Austen Jensen, vice president for government affairs at the Retail Industry Leaders Association.
“Going forward, the payment industry needs to focus on finding solutions to the growth of fraud both in stores and online, where current measures are inadequate for protecting consumers and merchants,” Jensen adds.
Walmart said in a statement about just saying no to the signature:
“Removing this step at checkout will save time for our customers and decrease the expense associated with storing and presenting signatures back to the issuer, all while preserving security for customers.
“We anticipate this will result in savings that can be used to continue to lower prices for our customers.”
Is safety in jeopardy?
Industry insiders don’t think the rollout of no-signature policies will embolden fraudsters.
Philip Andreae, a consultant in the digital payments industry, questions whether the signature requirement for in-store card purchases really improves the security of transactions.
Why? Merchants typically don’t check a cardholder’s signature – either on a paper receipt or an electronic screen – against the signature on the back of a card, he says, and many cardholders fail to sign their cards anyway.
“If merchants were doing what they are supposed to do, then maybe it has added a level of security,” says Andreae, of Philip Andreae and Associates. “Otherwise, as it is today, there is no value.”
Gemalto’s Jania believes not requiring signatures will have no effect on card security, since existing chip technology and other high-tech tools for verification of a cardholder’s identity aren’t going away.
Laura Townsend, senior vice president of operations at the Merchant Advisory Group, agrees. In a statement, she praised the no-signature moves and noted that “new and improved” digital authentication tools – such as face, voice and fingerprint recognition – will bolster the security of in-store transactions via credit or debit card.
Not a 'radical' idea
Mastercard describes dropping the signature as “another step in the digital evolution of payments and payment security.”
“In our digital, fast-paced marketplace, consumers appreciate any opportunity to save time. This is why Mastercard led the charge to officially ‘retire’ cardholder signatures from store receipts,” Linda Kirkpatrick, Mastercard’s executive vice president of U.S. market development, said in the April news release.
Discover says the change is part of its efforts to continually improve the payment experience by speeding up the time spent at checkout all while maintaining a high level of security for both customers and merchants.
Discover has already implemented a number of digital authentication technologies such as tokenization, multifactor authentication and biometrics that are more secure than requiring a signature and provide a more seamless payment transaction.
At Mastercard, Kirkpatrick stresses that ensuring the security of credit and debit card transactions continues to be a top priority, but not requiring signatures will accelerate the checkout process.
“While security remains paramount,” Kirkpatrick writes, “we know that convenience is also a large part of what consumers want when they are shopping and paying.”
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