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Shoppers who are sick of long lines at checkout may get some relief soon.
Credit-card companies American Express AXP, +1.48% Discover DFS, +1.87% MA, +2.76% and Visa V, +1.80% won’t require customers to provide a signature at checkout when they use EMV (or “chip”) credit cards starting this month.
Eliminating signatures is a positive development for the retailer and the consumer, industry experts say. Signatures are no longer a reliable way to check a shopper’s identity, and the signature requirement just slowed down transactions.
Many countries, including the U.K., have already eliminated signatures, in favor of “chip and PIN” technology, which requires shoppers to enter a unique number after making a payment with their card, said Nick Clements, the co-founder of the personal-finance company MagnifyMoney, who previously worked in the credit-card industry.
“How do we make it as easy and frictionless as possible to approve a transaction?” Clements said. One solution: Getting rid of pesky signatures on credit card purchases that few people check. The U.K. made that shift in 2004. “We’re way behind,” he said. “We’re the laggers.”
Credit-card signatures have become obsolete
Decades ago, a merchant might have actually relied on a customer’s signature to prove their identity, Clements said. But credit card companies have developed sophisticated new methods of identifying fraud, by analyzing customers’ transactions over time and recognizing their spending patterns, he said. That has made the signature “completely useless,” Clements said.
What’s more, many merchants have already stopped requiring signatures for small purchases and online, said Matt Schulz, an industry expert at the credit-card website CreditCards.com. Many customers might not even notice the elimination of signatures since they’re used to foregoing them for small purchases, he said.
The last major credit-card change, a switch to “chip” credit cards was probably more disruptive to consumers than eliminating signatures will be, Schulz said. (Chip credit cards are also known as EMV cards, which stands for Europay, Mastercard and Visa, the three companies that collaborated to create the technology.)
Although the companies said they will no longer require signatures beginning in April 2018, it may take merchants longer to make that adjustment, Schulz said.They may need to update their point-of-sale technology, including their cash register systems, and may require signatures until they do.