Last year, Mastercard, Visa, Discover, and American Express eliminated the requirement that customers must sign when using their credit cards. One of the drivers behind the change was providing better checkout experiences for consumers.

In a press release, Linda Kirkpatrick, executive vice president, U.S. Market Development at Mastercard, stated: “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. Merchants recognize that cardholder signatures have limited use, and are embracing this change to create efficiency for their customers.”

Although brands no longer require signatures, they left the final decision of whether a customer has to sign up to the merchant. So, what’s the right move for your business? 

Is Accepting a Payment Card without a Signature Secure?

Although collecting signatures was a long-time practice to verify that the customer was an authorized cardholder, new technologies have made signatures virtually obsolete. Discover, for example, says some of the safety and security features it uses include:

  • EMV chip technology that allows the card to communicate with the payment terminal. It produces a unique code for each transaction and makes it virtually impossible to counterfeit cards. Also, if a card has been reported lost or stolen, the system will know.
  • Tokenization that replaces actual card data with a “token” on mobile devices so a hacker would not be able to find data they could use or sell.
  • The option for cardholders to freeze accounts to prevent purchases if they can’t find their cards or if their cards are stolen.
  • Daily monitoring of every purchase for every customer.

Jasma Ghai, vice president of Global Products Innovation at Discover, explained in a press release, “With the rise in new payment security capabilities, like chip technology and tokenization, the time is right to remove (the signature) step from the checkout experience.”

It’s worth pointing out that EMV chip cards only provide security to your customers and your business if you upgraded to an EMV-compliant payment solution. If you haven’t, you are taking a risk. Your business will be responsible for fraudulent charges, chargebacks, and possibly fines associated with the transactions. 

Will Your Customers Be Comfortable?

Change, especially with checkout processes, may take a while for your customers to accept. When the U.S. transitioned to EMV technology, one of the decisions that the payment industry debated was whether to use “chip-and-PIN” as Europe had done or to maintain signatures as verification. Since U.S. consumer were accustomed to signing, signatures won out over PINs. So, will they be comfortable not signing during a credit card transaction now?

Some larger merchants have already eliminated the signature requirement, so it’s possible that your customers are getting used to not signing when they use their cards. And, with card brands issuing millions of contactless cards designed to allow consumers to “tap-and-go,” eliminating signatures from your card transaction process may help pave the way for more changes ahead.  

The Final Decision is Yours

Card brands changed their signature policies, but that didn’t automatically change the settings on your payment solution. It’s up to you to work with your point of sale solution provider to update your system if you decide you’re ready not to require signatures for card transactions. Also, remember it doesn’t have to be “all or nothing.” You can still require customers to sign if transactions total a certain amount.

The good news is that you have the flexibility to design checkout experiences that will enhance overall shopping and dining experiences that are tailored to your customers.

Want to learn more? Contact PlazSales.

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