Have you noticed something different about credit card signature requirements recently? Many merchants are no longer asking customers to sign for credit card purchases. So, what’s the reason for not asking customers to sign anymore? Why have signatures for credit card purchases become obsolete? Why do credit card companies think they aren’t needed anymore? It’s simple! Just read this article and you’ll know.
Signature for Credit Card Purchases
A large number of retail executives have already stopped using signatures for payment card transactions or are planning to drop them.
American Express, Discover, MasterCard, and Visa have already announced that signatures aren’t a useful method to prove someone’s identity. The mentioned 4 major players in the field have already reported they won’t be requiring signatures from customers to complete card transactions.
Namely, the payments company Discover has already announced that it won’t require customers to provide a payment signature while making retail purchases with the company’s credit/debit card at the point of sale (POS) when it’s on the Discover Global Network in the US, Canada, Mexico, and the Caribbean.
As Discover has mentioned, the change is the result of the company’s efforts to make the payment experience better by accelerating the checkout process, simultaneously ensuring a high level of credit card security for customers and merchants.
Discover is already making use of a number of other digital authentication technology solutions, including tokenization, multi-factor authentication, as well as biometrics. These offer added security as compared to requiring a signature. In addition, they account for more seamless payment transactions.
As for MasterCard, the company has been working on making the same change for years. The reason they’ve been waiting for years was the fact that the cards embedded with computer chips weren’t that much common.
Finally, Walmart also thinks signatures are “worthless.” The company isn’t already recording them on the majority of transactions processed.
Signature Requirements
Card purchase signatures can be described as customers’ contract with merchants. A signature of this type proves the customer has been present in the store and agreed to the purchase once it appeared on his/her statement.
So what’s changed? Signatures are no longer a must! One of the biggest reasons for this has to do with the advances in technology. After that tiny little chip became embedded in the majority of cards, cards began offering a higher level of security, which isn’t the case with the signature.
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Now, let’s see how credit card purchases work without a signature. Well, the chip generates unique codes for each and every transaction, and makes these cards much more difficult to copy.
According to security experts, if that chip card comes also with a PIN, fraud gets reduced to an incredible extent. As various merchants and card companies report, getting along without a signature also accelerates the transactions process at the point of purchase.
By the way, the chip isn’t the only thing adding to the level of security. Credit card companies rely also on fraud detection methods using mathematical algorithms to track down fraudulent purchases.
On a side note, be aware that MasterCard is removing its name from the pair of interlocking red and yellow circles. The name “MasterCard” has present there for over 50 years. MasterCard Inc. follows the practice of brands like Nike, Apple, and Target that prefer using an image instead of their name in most marketing materials.
To sum up, the signature used for identity verification is rapidly going extinct. Of course, this doesn’t mean card signatures will vanish overnight. In fact, the change is optional, so merchants can decide whether they want to drop it or not. As credit card companies note, this change can’t affect security and can help customers get out of the store faster when buying something on the card.