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Why is Everyone Ditching the Signature?

Think back to all the times you've stood in a long line and then, when you finally reached the checkout juggling a wallet, your debit card and a cart full of stuff, you had to stop to scrawl your name on a line.

For years, digging for a pen to sign a receipt — or in recent years, grabbing a stylus to sign a screen — has been standard practice when paying with plastic at a store, restaurant or entertainment venue. And you may have noticed that sometimes people were not even checking for a signature match at the point-of-sale. But soon that extra payment step could be gone for good.

Late last year, Discover announced that it will end its signature requirement in April 2018. Discover isn’t the only one. All of the other major card brand networks have also committed to ending their signature requirement.

There can be big benefits to doing away with signatures for you as an issuer. Removing the need to sign on the dotted line may make shopping more convenient for consumers and speed up checkout lines. This increased efficiency may make your cardholders happy as making purchases continues its steady move towards more frictionless experiences.

Many transactions already happening in stores do not require signatures due to security measures that have been put into place. The new technologies and changes that are making signatures obsolete include:

  1. The use of digital authentication technologies including biometrics, multi-factor authentication and tokenization, which allows merchants to use a "token" to access customer credit card data that is stored securely offsite
  2. The more widespread use of EMV chip technology in debit and credit cards
  3. The growth of online shopping, which means many purchases are "card not present" transactions anyway
  4. More sophisticated fraud detection, such as advanced machine learning algorithms that can help to tell a fraudulent purchase from a cardholder's normal spending.

The use of these and other advances has modernized payments to the point that a name written on a piece of paper — or a screen — will soon be a relic of the past, like dial-up Internet access. And like dial-up, signatures are one your cardholders won't miss.

 

Want to talk about the latest happenings in payments?  Talk shop with a PULSE representative!