What the End of Signatures Means for Merchants

The checkout process just got a little bit faster! As of April 14th, all four major card issuers- American Express, Visa, Discover, and MasterCard- have eliminated the requirement for cardholder signatures at checkout. While in the past, the customer signature played a big role in preventing fraud and transaction disputes, it has become largely unnecessary due to security advances.

Why Signatures are Being Phased Out

Historically, signatures at checkout were meant to verify the buyer’s identity and secure transactions, and the merchant would actually check if the consumer’s signature matched the signature on the card. However, now that credit card transactions can be authorized in seconds, a signature is not needed to confirm if the transaction is legitimate. And at the same time, new technologies like EMV chip cards, biometrics, data tokenization, and fraud-screening algorithms have all proven to effectively reduce fraud in the first place (according to Visa, fraudulent purchases have dropped by two-thirds since the rollout of EMV). 

At a time when retailers are scrambling to reduce friction for their customers, it’s no surprise that signatures are being eliminated- the four card issuers all acknowledged that removing the cardholder signature requirement will speed up the checkout experience without compromising security. Jaromir Divilek, the executive vice president of global network business for American Express, said that “the payments landscape has evolved to the point where we can now eliminate this pain point for our merchants.”

Ultimately though, it is up to merchants whether or not they want to do away with cardholder signatures. Here are a few things for you to consider:

Customer Signatures May Still be Important for Preventing Chargebacks.

If you list return policies or other policies on your receipts, a signature could prove the customer’s acceptance of the policy, which may be helpful in the case of a chargeback. We recommend that you do your research carefully to see if this could affect you.

If You Haven’t Yet, Upgrade to EMV

One of the biggest reasons that cardholder signatures have become optional is that EMV compatibility is now widespread among merchants. Card issuers have realized that in this environment of improved security, getting rid of signatures at checkout doesn’t put anyone at increased risk. Whether or not you decide to make signatures optional in your store, EMV compatibility is an important way for you to prevent fraud. And if you decide to eliminate signatures, it is necessary.

Consider Accepting Mobile Payments

Another factor contributing to the elimination of card signatures is the growing use of mobile payment methods that don’t require a signature and are quick and easy to use. Appeal to this growing interest by accepting payments from mobile devices such as Apple and Android Pay in your store.

Upgrade Your Hardware

If you decide to get rid of signatures, many POS systems will allow you to remove the signature capture feature and the signature line from receipts. Keep in mind that if you choose to continue requiring receipts, EMV-ready POS systems will still support signatures as a cardholder verification method.