Mastercard, Discover, American Express and Visa Ditch Signature Requirement
For decades we’ve been signing our names to make purchases at the counter. But now, the sales signature could be as relevant as the 8-track tape player. As of April 2018, the four major credit card companies scrapped requiring signatures after a transaction. For Visa, this only applies to businesses that have the ability of accepting chip cards (EMV).
There are a lot of benefits to this new non-requirement, including faster transaction times, reduction in operating costs, and merchants will no longer have to provide customer signature to fight chargebacks.
The new chip cards helped the industry head in this direction. They are nearly impossible to clone to create counterfeit cards, thus cutting down on fraud. The chip generates a unique authentication code each time the card is used, so even if the card is stolen, it’s useless for future transactions. Chip card data can still be breached, but a useable card cannot be created from that data. Since chip cards were introduced, point of sale fraud has decreased 60-70%.
The next EMV update will be in 2020, when gas stations will be required to accept chip cards. Gas pumps have become a hotbed for fraud with criminals placing skimmers over the readers to collect the data stored on the card’s magnetic strip. Gas stations are slow to move to chip cards because of the enormous cost to convert the gas pumps.
Before scrapping the signature, check your local laws to see if there are any requirements for customers to sign. Regardless, merchants should see the change as a major convenience.