If you’re a merchant in the United States you’re probably already well aware of the new credit card signature requirements, or lack there-of, coming into effect next month. But, if for some reason you’ve been too busy, haven’t paid attention to the news, or maybe you’ve just been on vacation-since last October- and have not been made aware of the card brands decision to nix signatures on their credit card slips let me catch you up to speed.
As of April 1, Mastercard will “no longer require signatures at checkout for any credit or debit card purchases in the Canada and the U.S.”.
Once MasterCard made their announcement it wasn’t long before both Discover and American Express jumped on board with their own announcements to eliminate signatures at the point of sale also starting in April 2018. While Discover’s signature elimination only applies in four countries; United States, Canada, Mexico and the Caribbean, Amex set out to make it effective at every one of it’s merchants around the world.
Visa, on the other hand, has decided to go in a slightly different direction with their announcement to make the signature requirement optional for their merchants in North America, allowing them to decide for themselves if they want to require a signature from their customer’s or not.
Don’t our signatures make it more secure?
Actually, they don’t. Since the implementation of the EMV chip card, along with advancements in biometrics and tokenization it has become much harder for hackers to get ahold of the information they need to commit fraud. When asked, the Executive VP of Global Network Business at American Express. Jaromir Divilek stated “Our fraud capabilities have advanced so that signatures are no longer necessary to fight fraud,” The capabilities that he was referring to include strong digital platforms that use more secure methods, such as biometrics along with chip and tokenization to prove the validity of one’s card. Per a press release published by Visa, studies have shown that since the implementation of EMV chip cards and EMV ready technology at on premise POS systems fraud is down 66% at the physical point of sale.
Besides the fact that merchants, nor their employees, really ever bother to check the signature and compare it against the signature on the back of the card anyway.
People that are old school, and may be a little set in their ways, can rest assured that eliminating signatures will have no impact on the safety of using their card.
But why go “no signature required” or NSR?
This is actually aimed at retail type merchants with long checkout lines and is supposed to make the checkout process more streamlined and speed up the line. Card brands are always on the lookout for ways to make the purchase process more frictionless for consumers.
MasterCard, as well as all of the other card brands, is also hoping that this play will help to boost consumer adoption and use of their digital wallet MasterPass. Hoping that once consumers feel that is safe and secure to not have to use their signature they will be more likely to use the NFC technology to tap-to-pay and walk away. The card brands main goal is to make the choice to use their card at each and every purchase the consumer makes an easy one.
In this way, not having to worry about waiting for a slip and taking the time to sign it will help make the payment process much quicker as well as improve the entire shopping experience overall.
And frankly, this is new “requirement” in nothing very interesting or shocking to the younger generation. While the older generations cling to the feeling that providing a signature is not only required but somehow much more secure, proving that they in fact are the person providing the card used to make the purchase, the younger generation sees it as a nuisance. They are already more and more familiar with just being able to dip the card in the EMV slot and walk away.
The one downside to MasterCard’s “no signature required”.
The one industry that may be effected the most in a negative way with the lack of signature requirements is the restaurant and bar, or service industry. While letting go of signature slips is aimed mostly at retail sales environments and not service industries, people still become accustomed to a particular norm when used on a regular basis. They tend to forget which situations do or don’t require them to sign just assuming they no longer have to anywhere.
Apparently in the service industry this is commonly known as the “dip and slip”. In an industry where many of the employees rely on tips to make up the majority of their income, having a consumer not have to sign, or at least think they don’t, means the consumer also does not have to fill in the tip line. They notoriously dip their card into the EMV chip card slot when it’s their turn to pay for a round of drinks and absentmindedly turn and walk away as soon as it is approved, effectively getting out of having to tip for their service.Younger patrons, bar-hoppers, concert goers, all have become almost too used to not having to provide their signature when paying for their items, so they have almost naturally become the worst offenders. This phenomenon, so far, isn’t happening as much in restaurants because you still have to give your card to the server to process and they bring it back with the slip, and of course there is a “standard” still held for tipping in a dining situation. But with more and more restaurants going to hand held terminals and pay at table terminals it does allow people to sort of “get out” of conforming to that standard.
Keep in mind that generally, not having to sign a credit card slip is only for retail sales environments starting in April, 2018. It is also important for consumers to remember that this is also optional for all locations where Visa card acceptance is concerned. So depending on where a person is shopping, which card they are using and the merchants own choice consumers may still have to sign a slip, so don’t just walk away before you figure it out.
If you have more questions about the new requirements, or to make sure your establishment is up to date with EMV chip-ready terminals, don’t hesitate to give Bankcard Brokers a call today. We are always here to help in every way to ensure your success.