Signatures for Payments to Be a Thing of the PAST

Mastercard, Discover, AmEx will ditch signatures

Not scribbling your name will speed checkout, won’t affect card security

John Egan
Personal Finance Writer
Writes trendy stories about credit cards.

Signature on payment slips may be going the way of the dodod

You may not be jotting your name on payment slips and checkout terminals much longer. Mastercard, Discover and American Express plan to ditch the signature requirement at merchants April 2018, and experts say Visa likely will do the same.

  • Mastercard, which announced the move in October, 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 2018.

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.”

Jack Jania, senior vice president of strategic alliances at Gemalto, expects Visa also will follow Mastercard, Discover and American Express in ditching the need for signatures within a year.

If Jania’s prediction holds true, that would spell the end of a decades-old ritual for cardholders: scribbling your name on payment slips.

“This is a good move for both consumers and merchants, as it will speed up the in-store purchase experience,” Jania says.

And when might Visa join the no-signatures-required party?

Jeanette Volpi, head of North America communications at Visa, declined to say. She added, though, 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.


‘A costly yet feeble means of securing transactions’

The Retail Industry Leaders Association and even Walmart, the nation’s largest retailer, say it’s time to say so long to the signature requirement.

“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. Discover and American Express announced in December that they, too, will eliminate requiring signatures at point-of-sale terminals.

“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.”

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 endanger cardholders’ data.

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 move 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.”

“At first glance, this might sound like a radical proclamation, especially to people who have had credit and debit cards for decades,” Linda Kirkpatrick, Mastercard’s executive vice president of U.S. market development, wrote in a blog post announcing elimination of its signature requirement.

“However, the change matches all of our expectations for fast and convenient shopping experiences.”

Mastercard says merchants such as retail stores and restaurants will be offered the option to ask for signatures, though.

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, multi-factor authentication, and biometrics that are more secure than requiring a signature and provide a more seamless payment transaction.

“As the payments industry continues to evolve and introduce new methods of transacting, we’re making sure that Discover is providing customers and merchants with a smooth and more secure payments experience,” Ghai says.

Kirkpatrick stresses that ensuring the security of credit and debit card transactions continues to be a top priority for Mastercard.

“What consumers will find reassuring is that removing the need to sign for purchases will not have any impact on safety,” she wrote. “Our secure network and state-of-the art systems combined with new digital payment methods that include chip, tokenization, biometrics and specialized digital platforms use newer and more secure methods to prove identity.”

Mastercard research shows most cardholders and merchants are ready for the signature requirement to die, particularly since that will accelerate the checkout process.

“While security remains paramount,” she writes, “we know that convenience is also a large part of what consumers want when they are shopping and paying. … The move will help merchants speed customers through checkout, provide more consistent experiences for every customer with every purchase and should decrease costs associated with safely storing signatures.”

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