Amex, Discover, And Mastercard Are Eliminating Signature Requirements As Of Tomorrow

Over the past six months the four biggest payment processors in the US — American Express, Discover, Mastercard, and Visa — announced that they’d be discontinuing signature requirements on credit card purchases under select circumstances. Mastercard was the first payment network to make this announcement, and then for competitive reasons their three biggest rivals matched within months.

All four companies announced that they’d eliminate the signature requirement as of April, though an exact date wasn’t given at the time. The Verge reports that American Express, Discover, and Mastercard will be eliminating signature requirements as of tomorrow (April 13), while Visa will eliminate signature requirements as of later this month.

The exact regions where the signature requirement is being eliminated varies by company:

  • American Express is eliminating the signature requirement globally
  • Mastercard is eliminating the signature requirement in the US and Canada
  • Discover & Visa are eliminating the signature requirement in North America

Why you still may have to sign for your purchases

While the requirement is formally being ended tomorrow for three of the four payment companies, that doesn’t mean you’ll no longer need to sign. Merchants still have the option of whether or not they want to collect this information — some will stop requiring signatures right away, others will stop requiring signatures in several days or weeks, and others have no plans to eliminate the requirement.

Isn’t this bad news for credit card security?

No, not really.

First it makes sense to understand why credit card companies are making this change. They want to speed up the check-out process as much as possible, in hopes of you putting their card at the top of the wallet. At least I assume that’s what the logic was when Mastercard first announced this, though they lost that edge when all of their major competitors matched their policy.

The reason this doesn’t have any impact on security is because in practice credit card companies didn’t actually use signatures to authenticate purchase. You could literally scribble anything and your purchase would be approved, so really the whole signature requirement was more of a security theater than anything else.

This is good news, but…

I’m a big fan of this development, as it will make the check-out process quicker. However, what confuses me is that card these companies aren’t taking the chance to finally update their technology and implement Chip & PIN technology in the US, which is much securer. It’s bizarre to me how the US is the largest market in the world for credit cards, yet we also have some of the worst credit card security. Wouldn’t this be the ideal time to finally make this update?

I’m out of the US at the moment, though if you’re in an eligible market and use a credit card starting tomorrow, please report back on whether you’re asked to sign!

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Jim Guest

Wow, you people don't realize why the US doesn't have chip+pin: there is no reason to. In the US< the cardholder is not liable for fraud, so why should they be asked to remember a PIN? Then, most US cardholders have a few cards, so the first card with a PIN is the first one they stop using because they forgot the PIN. Fraud detection is pretty advanced and the card issuer is ready to absorb the losses from fraud. It's not backward -- it's an educated business decision.

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Stanley Diamond

@FrequentFlyer thank you for that. Oh my gosh. Yes, you are right. It is much easier to dispute fraud with US banks/credit cards. This is probably why I would never want a foreign issued credit card even if I can. And yeah, the foreign exchange rates....

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abc Guest

@Santastico: The next innovation in Europe already exist and it's called contactless. It was virtually nonexistent a couple of years ago, but now basically everyone has it, and also a lot of places that didn't accept credit cards previously. @Lis: That is because in Australia (and must other places outside the US), transactions where the customer signs are so rare that people would follow the formal procedure, which is comparing signatures, instead of just treating it as a routine transaction without bothering.

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Chris Guest

Visa and MasterCard aren't issuers, and American Express in this context isn't either - those three parties provide what are known as payment scheme networks.

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FrequentFlyer Guest

@Stanley I agree. That's why I still have my US credit cards although I have moved overseas more than 10 years ago. I like to use them for purchases on US online merchants as the risk of fraud is higher plus there's no need for me to pay the 3% FX charge unlike using my credit cards that are issued in other countries. That being said, it's also much easier to file and resolve any dispute charges with my US card issuers.

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