April 13th 2018 marked the end of the decade-old ritual for cardholders. No longer will credit card signatures be required. American Express, Mastercard, Visa and Discover have finally acknowledged that signatures are not always a useful way to confirm one’s identity. As credit card companies continue to deploy higher-tech payment solutions — such as contactless pay and biometric payments using fingerprints and facial recognition — more shoppers may soon not even need to insert a card into a card reader to pay.
Why is this happening?
Card companies cover the costs of fraudulent credit card spending. They started adding the microchips more than a decade ago to reduce fraud-related losses. Since the switch from magnetic stripe credit cards to chip-embedded cards, which began in October 2015, the signature has been made unnecessary. Chip cards seem to be doing their job to cut down on card fraud. Visa reports chip-enabled merchants have seen a 66% decline in frequency of counterfeit card fraud occurrences over the last two years, as well as a 58% decline in counterfeit fraud losses.
How will this change affect business owners?
Card signatures won’t vanish overnight however the card companies expect the change will speed up the checkout experience because business owners won’t have to require customers to sign to complete a transaction. Merchants will still have the option of asking for a signature for any other business reasons, but the requirement will be history by the end of April. In the long term, merchants should update their payment application to allow the option of not printing or displaying a signature line on receipts. In the short term, they can just tell customers they don’t need to sign.
For assistance with making any necessary updates to your merchant account or payment processing hardware, reach out to AMP Payment Systems and we will be more that happy to assist.