As Its Rivals Write off Signatures, Visa Stands Alone

Three of the four U.S. general-purpose card networks—American Express Co., Discover Financial Services, and Mastercard Inc.—now plan to cease requiring signatures for point-of-sale transactions made with their cards beginning in April. That leaves Visa Inc. as the sole signature supporter.

AmEx on Dec. 11 joined Mastercard, which started the no-signature movement in October (“Signing Off,” December, 2017), and Discover, which changed its policy a few days before AmEx. Discover said its signature requirement would end for transactions in the U.S., Canada, Mexico, and the Caribbean. AmEx’s change applies worldwide, though the company says cardholders may still sign if a merchant asks or local law requires a signature.

AmEx says the need for signatures has declined because of improving anti-fraud measures and other changes in payments, including the introduction of EMV chip cards, the growth of contactless payment options, and the continued expansion of online commerce.

Plus, AmEx wanted to make shopping with its cards similar everywhere.

“American Express decided to make this change globally because it will enable a more consistent checkout experience across all regions,” an AmEx spokesman says in an email. “A key example of this would be situations when a U.S. cardmember travels outside of the U.S. to a country that is primarily chip-and-PIN and makes a purchase at a merchant with their U.S.-issued card. Currently, that merchant may require the cardmember to sign their receipt because our U.S. consumer cards are not enabled with PIN.

“As a result of our policy change, in April 2018, that merchant could choose not to collect the cardmember’s signature, which may speed up the checkout process and make the experience more consistent with how other local cardmembers check out.”

The issue of requiring signatures in the U.S. intensified with the advent of EMV chip cards in 2015. Merchants contend that a PIN represents a better authentication method, but issuers and the card brands have been reluctant to add them to credit card transactions because of the possible disruptive aspect of educating consumers. Now three of the four card brands have leapfrogged over that.

After AmEx’s announcement, Visa said it supports multiple technologies “to bring speed, security, and consumer convenience to the authentication and authorization process.” That was the same statement it issued in October.

But industry observers speculate Visa will follow the other brands. “With Mastercard and AmEx giving up on signatures, it seems inevitable that Visa will follow,” says researcher Thad Peterson, senior analyst with Boston-based Aite Group LLC.

Merchant groups express similar views.

“I can’t imagine how Visa could respond to investor, customer, and other public inquiries as to why they believe signature is a valid and worthwhile CVM [cardholder verification method] when every one of their competitors’ actions indicate otherwise,” says Laura Townsend, senior vice president of operations at the Minneapolis-based Merchant Advisory Group.