Credit card signatures are about to become a thing of the past, with American Express, Mastercard, Visa, and Discover — the four major US credit card companies — set to do away with the requirement for signatures on in-store purchases in the coming days.
American Express, Mastercard, and Discover have all confirmed that they’ll be flipping the switch on April 13th, while Visa should be following later in the month.
We’ve known it was coming for a while, with all four companies announcing that they’d be eliminating the signature sometime in April. But tomorrow will mark the beginning of the end for the signature, which admittedly has been on the way out for years. Most credit card companies stopped requiring them for smaller transactions as early as 2010, and things like checks and handwritten letters have been on the decline for decades with the advent of the smartphone and computer.
Plus, as The New York Times points out, the signature isn’t being dealt a single death blow all at once. All that the major credit card companies are doing is getting rid of the requirement for companies to have a signature: it’ll be up to stores to decide whether or not they’d like to eliminate them. Some, like Target and Walmart, plan to get rid of them later this month, while others — like Square, which has card readers used by a huge number of small merchants — will still require you to scrawl your John Hancock to authenticate your purchase.
Different credit card companies are also getting rid of the restriction in slightly different ways. American Express, for example, is nixing the requirement around the world, while Visa is making it optional only in North America for companies that offer chip systems. Mastercard is limiting it to just the US and Canada, while Discover won’t need signatures in US, Canada, Mexico, and the Caribbean. Even though it’s an international change, signatures are largely only a part of the checkout system in the US, since most other countries have switched to chip-and-PIN authentication.
Mastercard first announced that it would be removing the signature requirement back in October of last year, with the argument that signatures were slowing down checkout and were less secure than other new digital security techniques for preventing fraud, and was quickly followed by the other three major companies.
But it’s important to note that while US credit card companies are finally getting rid of the signature, none of them are taking the extra step of replacing it with the far more secure chip-and-PIN authentication that Europe uses. A few years ago, the US finally came on board with the more secure EMV chips in its cards (largely due to a policy that would penalize issuers and stores that didn’t shift over to chipped cards). But US payment processors refused to add the other half of the European system — requiring a four-digit PIN to verify a purchase, and instead relying on a signature to authenticate.
And while the desire to speed up checkouts by removing the largely useless signature is in theory a good thing — especially since signatures probably weren’t doing much to prevent fraud in the first place — it’s a shame that companies aren’t taking this chance to finally bring the US up to speed with the rest of the world and replace signatures with PINs.