Transaction Trends

It’s official – we are in the twilight hour of the signature requirement for credit card purchases. For American Express, Discover, Mastercard and Visa cardholders (i.e. pretty much everyone), the days of hastily scribbling on the dotted line while making a purchase are nearing an end.

In late 2017 and early 2018, the four major card networks each announced that they were scrapping the requirement for North American merchants accepting their cards. That means, starting April 13th, consumers and merchants across the country will no longer be held up by the outdated and obsolete practice.

“Removing the signature speeds up the checkout process, allowing merchants to move more customers through lines.” said ETA CEO Jason Oxman, “This is an important step in moving towards contactless payments and creating a consistent payment process at the point of sale. It doesn’t matter if you are buying a cup of coffee or a TV, a signature is no longer needed since anti-fraud capabilities have advanced.”

Thanks to the added security that EMV chip cards, mobile wallets and contactless cards have brought to the payments ecosystem through point-to-point encryption, tokenization and biometric authentication, there really isn’t a place for the signature requirement in the modern transaction. When a consumer uses their EMV chip card, their sensitive data is protected by more advanced layers of security than ever before, and in the event of a fraudulent transaction, they are 100 percent protected from liability. In fact, EMV cards have resulted in a 70 percent decline in counterfeit card fraud at chip-enabled merchants since they were first introduced in the United States. That means peace of mind is possible without wasting time.

And in retail, time is money. According to recent data from Mastercard, 72 percent of Americans say they get annoyed when they have to wait too long while someone in front of them is completing a transaction. Plus, drawn-out transactions and long wait times can mean millions in lost revenue in stores across the country.

But faster speeds and more secure transactions aren’t the only benefits to dumping the signature requirement. With the signature requirement retired, merchants and their payments service providers can more easily implement advanced, frictionless payment methods that consumers want, like mobile wallets and contactless cards.

In a recent ETA study, 66 percent of Americans said they think using mobile payments like Apple Pay, Google Pay and Samsung Pay is easier than paying with cash or a physical card. With 3 in 4 millennials and nearly 2 in 3 GenXers using mobile payments in their day-to-day lives, according to ETA research, using a smartphone to tap-and-go or order ahead is quickly becoming the norm. Contactless tap-and-go cards, which utilize the same technology as mobile wallets and EMV cards, will give consumers and merchants other fast and secure options for electronic payment without being bogged down by the signature requirement.

The signature requirement was an important, if not always adored, feature of the transactions of yesterday. The transactions of tomorrow (or next Friday, at least), will be better now that it is gone.