Wednesday , December 13, 2017

Discover Is the Latest To Erase a Signature Requirement for Credit and Debit Transactions

Discover Financial Services cardholders soon won’t have to sign for their credit and debit transactions made at the point of sale. As of April 2018, Discover is dropping the signature requirement for transactions made on the Discover Global Network in the United States, Canada, Mexico, and the Caribbean, the Riverwoods, Ill.-based card network announced Wednesday.

The move puts Discover in line with Mastercard Inc.’s October announcement that it is dropping the signature requirement for all U.S. credit and debit card POS transaction regardless of transaction amount. The card brands have long had no-signature policies for low-value transactions, usually of $50 or less.

Discover says the change reflects the brand’s efforts to improve the payment experience by potentially speeding up the checkout process. Discover says the time is right for this because of advancements in digital authentication technologies such as tokenization, multifactor authentication, and biometrics “that are more secure than requiring a signature and provide a more seamless payment transaction.”

“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,” Jasma Ghai, vice president of Global Products Innovation at Discover, said in a press release. “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.”

Some retailers have long called for dropping signatures for that reason, and because they want PINs as an authentication method. Part of the rationale, too, is that transactions that use PINs typically are cheaper for merchants because there historically has been less risk for fraud with them.

Discover says that merchants may need to update their POS systems to accommodate the change. Terminals, for example, will have to be programmed not to prompt for a signature at checkout.

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