Have you ever wondered why sometimes you are asked to sign for credit or debit transactions and sometimes not? Master Card, Visa, American Express and Discover have all recently removed the requirement that customers sign credit transaction slips. As a MasterCard spokesperson put it, “It is the right time to eliminate an antiquated practice.”
What was the purpose of the signature in the first place? If you’ve ever had a “chargeback,” an incident where a customer disputed a charge, you’ll recall that the signed slip was one of the pieces of evidence requested in the card-issuing bank’s investigation of the dispute. But with EMV chips, electronic “tokens,” and other means to combat fraud, the card associations are publicly acknowledging what you’ve known for a long time: the signature was basically useless as a fraud prevention mechanism.
The card brands are taking somewhat different approaches to the issue of customer signatures. Visa previously made signing optional for low value transactions. They estimate only 25% of their face to face transactions are now signed. And while they haven’t changed swipe transactions (using the traditional magnetic stripe,) chip card and contactless payment will no longer require signatures.
American Express, MasterCard and Discover have made signatures optional at the business owner’s discretion for all transactions. It may take years before signatures disappear entirely, but you will soon notice that you are signing less frequently.
For businesses taking cards, the change is optional. They are still free to ask for your signature, and many likely will continue to do so. Payment processors like TSYS, First Data, WorldPay, Vantiv, and others will have their own pathways to phase in changes. But what’s abundantly clear is that the signature is going away as part of the point of sale ritual, and probably sooner rather than later.
Have questions about the signature elimination or other security and fraud prevention topics? We welcome the conversation; just get in touch with us!
