Why you no longer have to sign for transactions

You probably know by now: as of last April, merchants are no longer required to collect signatures on card transactions. Some payment companies and merchants disabled signatures right away, while others have been slower to do so. But only a few months after the change, it’s becoming noticeably rarer to be asked to sign a receipt.

So as signatures begin to fade from view, it’s a good moment to look at the changes that prompted this decision, and what it means for the future.

Why You Needed To Sign (Until Now)
It’s hard to believe, but signatures really were required because they were once the best way to prove that the card you presented to a merchant was indeed yours. In this day and age, it had become rare for merchants to bother comparing signatures to the signature on the back of your card, but it was the reason signatures came into use originally.

When card companies conducted inquiries into suspicious transactions after the fact, signatures were crucial. In the early days of chargeback, as the New York Times notes, merchants that did not collect signatures faced increased liability on disputed transactions—sometimes even if they had the signature, but it did not match the one on the back of the customer’s card.

In recent years, card brands required signatures in fewer and fewer situations--they became very rare in transactions with small ticket sizes. But for larger tickets, the signature was often still needed.

Why They’re Gone Now
As fewer and fewer merchants scrutinized signatures and fraud measures became more sophisticated, it became clear to the card issuers that there had to be a better way. As Visa and others have noted, that better way turned out to be EMV.

EMV reduced fraud by 66 percent in less than two years, according to Visa, and that number is only increasing. It’s enough that it allowed issuers to continue their plans in April of this year to end requirements for signatures.

What It Means For The Future
Signatures were, for many years, one of the most helpful tools in fighting credit card fraud, but they eventually proved they weren’t up to the task any longer. Now, EMV is the gold standard in credit card security, but the most important thing to realize about fraud is that it’s always evolving.

Card brands will always be fighting to stay one step ahead of fraud, and you can see that with the impressive new biometrics that are becoming commonplace on smartphones. Facial recognition and Touch ID, for instance, are just the tip of the iceberg for biometrics. These will likely soon help to supplement EMV here in the US to make transactions as secure as possible.

So, very soon, you’ll be done signing for credit cards forever. As checks continue to decline, too, you'll be using your signature less and less. Will the next generation even bother to spend time practicing their signature, as so many before have? Only time will tell.

​​The End of Signatures, and the Future of Credit Cards

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