In an age of instant commerce, credit card companies are looking for ways to compete with one-swipe technologies. One surefire way to shorten the checkout lines has already been implemented by AMEX, Discover and MasterCard – no signature required. Visa is joining the “signature not required” club, meaning that the speed of credit card processing is now in the hands of individual merchant services.
The news does not mean that signatures will completely disappear from credit card transactions. The major credit card issuers are simply making it optional. Merchants now have the ability to remove signatures from the process, but they do not have to.
Mastercard has reported that it expects 80 percent of merchant accounts to have the signature removed from the process. The Merchant Advisory Group, a well respected industry research firm, expects 55 percent of merchants from all major credit card issuers to drop the signature requirement. Another 25 percent will be considering the move based upon their individual POS requirements.
It is Just a Little Signature – What is the Big Deal?
Expediency in the checkout line is really that important in the landscape of modern business. The fact that signatures are no longer a primary source of fraud deterrence is another catalyst for change. There is no reason to keep a useless process in place that takes up time and provides no real benefit to the merchant account. This is especially true because the majority of customers never really understood why the signature was important in the first place. If people are given a choice between signing and not signing, they are sure to choose not signing.
Digital Transactions News has reported that none of the four major credit card issuers were prepared for how many merchants would immediately take advantage of the no signature required policy. It seems as though merchants were just as ready to let go of signatures as the consumer. The changes are too new to quantify, but anecdotal evidence is usually enough to convince merchants that no sig is the right move.
Signatures Are Not All Bad
There are still transactions in which signatures are fairly important as fraud prevention. Car rentals, transactions with tips and high value commerce may still have a use for the extra step. There are also many municipalities that require signatures. Only time will tell if local law will change as a result of the new issuer policies, but there will certainly be pressure as more merchants switch to accepting chip cards.
However, Signatures are Losing Steam.
When Wal-Mart speaks, the credit card industry listens. The world’s largest physical retailer has released a definitive statement about no signature policies. They are fully in support of it, which means that many retailers will have to follow suit. The retailer stated that no signature required saves time in the checkout line and decreases expenses that are normally associated with actually presenting signatures to the credit card company. Technology has progressed to the point, says Wal-Mart, that customer security will not be altered in any way by implementing no signature required.
New Ways of Doing Business
You can bet that the credit card industry is feeling the pressure from competing payment methods, some of them coming straight from retailers. Apple Pay and Paypal are beginning to muscle in on territory normally occupied by traditional payment issuers, and they are gaining mainstream acceptance. Even cryptocurrency is becoming a viable option for the under 35 crowd.
Although none of the credit card companies will admit it, these new ways of doing business are nipping at the heels of of traditional retail. Even in the case of Bitcoin, which may still be more difficult than credit cards, there are other advantages. The anonymity of crypto transactions may be a major turn on for the people who are paying attention to the latest privacy scam from Facebook or the latest hack on AMEX.
How Your Life Will be Affected
If you ever cared about leaving a signature behind at a retailer, you will begin to see a gradual phasing out. The trend in the wider world is definitely leaning towards one stop shopping. There is very little chance that you ever knew what the signature was for anyway – it was never really publicized. As such, you will probably find your life slightly easier and incrementally faster. Just realize that you are not losing out on any security – you may actually be protecting yourself more.
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