No need to sign
4 of largest networks about to concede, stop requiring them
Four of the largest credit card networks — American Express, Discover, Mastercard and Visa — soon will stop requiring signatures to complete transactions.
For nearly a decade, Doug Taylor, a sales manager who travels often for work, has signed credit card receipts with a doodle of a dog wagging its tail.
No cashier has ever rejected his “signature” as invalid.
“It gets a laugh, most of the time,” said Taylor, 44, who lives in Mobile, Ala. “Or they just glance at it and don’t really notice.”
Credit card networks are finally ready to concede what has been obvious to shoppers and merchants for years: Signatures are not a useful way to prove someone’s identity. Later this month, four of the largest networks — American Express, Discover, Mastercard and Visa — will stop requiring them to complete card transactions.
The signature, a centuries-old way of verifying identity, is rapidly going extinct. Personal checks are anachronisms. Pen-and-ink letters are scarce. When credit card signatures disappear, handwritten authentications will be relegated to a few special circumstances: sealing a giant transaction like a house purchase, or getting a celebrity to autograph a piece of memorabilia — and even that is being supplanted by the cellphone selfie.
Card signatures won’t vanish overnight. The change is optional, leaving retailers to decide whether they want to stop collecting signatures.
Target plans to eliminate them this month. Walmart considers signatures “worthless” and has already stopped recording them on most transactions, according to Randy Hargrove, a company spokesman. It will soon get rid of them completely.
Mastercard said it has been wanting to make the change for years but held off until cards embedded with computer chips became common.
Card companies, which cover the costs of fraudulent credit card spending, started adding the microchips more than a decade ago to reduce fraud-related losses. The chips create unique codes for each transaction, making the cards much harder to copy. The chips have long been popular in Europe and Asia but took off in the U.S. only three years ago, when the card networks began punishing merchants that still relied on the old card-swipe technology. At that point, signatures became largely irrelevant in resolving fraud claims.
“The signature has really outrun its useful life,” said Linda Kirkpatrick, Mastercard’s head of business development in the United States.
It took nearly a century for technology to overtake the handscrawled name. The charge card dates back to the 1920s, when stores started issuing embossed metal plates with paper signature strips that allowed customers to add purchases to their ledger and settle the bill later.
Thirty years later, banks and merchant networks introduced cards that worked at a variety of retailers. By the late 1950s, a shopper could leave home without cash and buy groceries, gas and dinner, secured by a signature.
Investigators scrutinized signed credit slips to determine whether cardholders were present when transactions were made. Signatures were required on all purchases; merchants that failed to collect them had to absorb the losses if transactions were disputed. Retailers could also be held liable if they failed to notice that the signature on a receipt did not match the one on the back of the customer’s card.
Then online shopping took off, forcing card issuers to come up with new ways to detect and adjudicate fraud. As their forensic systems improved, signatures became a relic.
“I think they’re done,” said Mark Horwedel, chief executive of the Merchant Advisory Group, a trade group that represents large U.S. retailers.
Horwedel said he expected that three-quarters of his group’s members will have stopped asking customers to sign their names on receipts by the end of the year. Speeding up checkout lines is a powerful incentive, he said.
The new rules will vary at each card network. American Express is dropping its signature requirement globally, on all of its cards. Mastercard is ending the requirement only in the U.S. and Canada. Discover’s change applies in those countries plus Mexico and the Caribbean. Visa is making signatures optional in all of North America but only for retailers with payment systems that read chip cards.