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!