If you use credit cards for regular in-store purchases, you may have noticed a subtle change in the process over the last few months. Where merchants and retailers once required consumers to sign a credit card slip to verify a purchase and confirm their identity, this antiquated act is finally going the way of the dinosaur.
Each of the major credit card issuers — Visa, Mastercard, Discover, and American Express — pulled together to stop requiring credit card signatures as of 2018. The move was the result of careful planning amidst a transition toward greater credit card security over all. Thanks to measures such as chip and pin security and new payment methods such as contactless and mobile payments, signatures just aren’t necessary anymore.
Major Card Networks and Issuers Agree
Mastercard was the first card issuer to retire their requirement for signatures at checkout. Their announcement came through on April 5, 2018, with an official start date of April 13, 2018.
The stated goal of the move was to speed customers through checkout lines and give merchants greater control. Presumably, the change also intended to prevent merchants from having to save stacks of signed credit card slips for weeks or months until they could be safely disposed of.
“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,” said Linda Kirkpatrick, executive vice president, U.S. Market Development at Mastercard in a press release. “Merchants recognize that cardholder signatures have limited use, and are embracing this change to create efficiency for their customers.”
Discover, American Express, and Visa quickly followed suit with their own statements and admission that signatures are no longer necessary for point of sale purchases.
What Does This Mean for Consumers?
On the consumer end of the equation, this news won’t change the way you shop. You can use your credit card as normal with much beefier security than you had access to even five years ago; the only difference is, you won’t be required to sign a signature slip to prove your identity.
This shouldn’t come as much of a shock to anyone, but providing a signature wasn’t an accurate way to prevent fraud anyway. The process was also bound to hold up lines and slow down the purchasing process. A study from Mastercard noted that 72 percent of consumers get annoyed when the person in front of them takes too long to check out. Plus, a growing number of Americans — and particularly young people ages 18 to 24 — dislike writing their name in script, notes the study. Eliminating the need for a signature at checkout will inevitably speed up the process and reduce stress.
No Changes to Security or Liability
Credit card companies initially started requiring signatures to reduce instances of fraud, but new technology has paved the way for better means of security. Discover, for example, has implemented several digital authentication technologies “such as tokenization, multi-factor authentication, and biometrics,” they note. These measures provide a lot more security 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,” said Jasma Ghai, vice president of Global Products Innovation at Discover in a press release. “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.”
In terms of liability, consumers still have little to worry about when it comes to their credit cards. Card issuers and networks will continue to provide the same liability protections they did before, with the vast majority guaranteeing zero liability for fraudulent purchases.
Also note that the Fair Credit Billing Act (FCBA) adds an additional layer of security against fraudulent charges, just as it has since it was passed in 1974. Thanks to the FCBA, consumer liability for unauthorized credit card charges tops out at $50 no matter what is charged to their account. If you report a missing card before your credit card is used, then you are not responsible for any purchases they make. If a hacker steals your credit card number to make a fraudulent charge, you are also off the hook when it comes to those charges, according to the Federal Trade Commission (FTC).
When Will Retailers Stop Requiring Signatures?
Like any sweeping change, it takes a while to get everyone on board. Some merchants were able to stop accepting signatures right away, but others will need some time to fully implement the change.
Based on card issuer responses, it seems there’s no big hurry to force anyone to change what they’re doing either. In a press release from Visa, for example, the credit card network noted that EMV-enabled merchants who preferred to capture a signature to verify customer identity could continue to do so. At the same time, they would no longer be required to keep, organize, or store the signed receipts.
The Bottom Line
Eventually, retailers, merchants, restaurants, and everyone else who accepts credit cards as payment should let the signature requirement die a slow but necessary death. Until that day, consumers can keep using credit cards as normal with the knowledge they may have to scribble their name from time to time.
At the end of the day, the end result will be a win for consumers and everyone else. Most people don’t sign the back of their credit cards anymore, and few retailers take time to match up signatures anyway. In the end, the process had become as outdated as say, paper checks, floppy disks, and phonebooks.
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