Discover and American Express Join Mastercard in Eliminating Signatures
Back in October we reported that Mastercard is removing the signature requirement on all purchases starting in April 2018. Now both Discover and American Express are following suit, also getting rid of the need for a signature for purchases. Discover is eliminating the requirement for credit and debit transactions made in the United States, Canada, Mexico and the Caribbean, and Amex is doing a worldwide elimination for all purchases.
The goal is to make purchasing simpler and quicker when you're shopping in a store. Many consumers already understand how their transactions can speed up without the signature requirement--many credit card companies currently don't require a signature if a purchase is under $50.
"As the payments industry continues to evolve and introduce new methods of transacting, we’re making sure that Discover is providing customers and merchants with a smooth and more secure payments experience," said Jasma Ghai, vice president of Global Products Innovation at Discover, in a statement. "With the rise in new payment security capabilities, like chip technology and tokenization, the time is right to remove this step from the checkout experience."
However, the introduction of EMV chip cards in the U.S. have made it feel like transactions take much longer, simply because the processing happens only after you insert the card into a card reader, unlike a magnetic stripe that you can swipe mid-transaction.
The efforts of Mastercard, Discover and American Express may shave a little time--and frustration--off of the transaction. "Our fraud capabilities have advanced so that signatures are no longer necessary to fight fraud. In addition, the majority of American Express transactions today already do not require a signature at the point of sale as a result of previous policy changes we made to help our merchants," stated Jaromir Divilek, executive vice president, Global Network Business, American Express.
American Express did note that it will eliminate all signatures where it can, although if local laws require the company will still have to collect them.
Along with the adoption of EMV technology, drivers behind this change include chip technology that thwarts card cloning by thieves; the development of contactless payment options like tap-and-pay technology both in cards and mobile devices, and the prevalence of ecommerce--because you don't transmit signatures when you shop online. Multifactor authentication and biometrics that have been coming onto the market also help deter card theft.
Both companies also mentioned their own technological advances. Discover's Digital Exchange manages payment credentials on mobile and digital devices by creating tokens to secure transactions. It also offers a host of identity theft deterrents, including website monitoring for fraudulent use of a cardholder's Social Security number, a card number freezing service if a card is temporarily lost, purchase monitoring and zero fraud liability. American Express also touts its machine learning algorithms that help it detect fraud more precisely.
Merchant organizations and retailers are on board with this decision, as the new process will speed up lines at merchants too. "This move will help merchants provide a quicker check-out experience for more customers by removing potential friction at the point of sale," said Laura Townsend, senior vice president of operations for the Merchant Advisory Group, a payments organization.
Walmart is also on board with this decision, saying that it provides more flexibility to merchants who want to test out new payment technologies. Walmart's been successful in this endeavor with its Walmart Pay mobile app. "The introduction of our Walmart Pay mobile app has raised our customers’ expectations for being able to check out quickly and easily,” said Mike Cook, senior vice president and assistant treasurer at Walmart. “Having to sign a receipt can be a hassle for customers and is not necessary to prevent fraud at the point of sale. We’re pleased American Express has decided to eliminate its signature requirements, which will promote a more seamless shopping and checkout experience for our customers.”