Credit Card Companies Begin Phasing out Signatures

April 10, 2018

Paying with a credit card is an almost entirely electronic process except for one notable step: the signature. Although this final part of the transaction is meant to provide another layer of security, many consumers quickly squiggle something down on the line just to get the procedure over with. Then there are people like Doug Taylor, who goes the extra mile by signing his receipts with a doodle of a little dog wagging its tail. “It gets a laugh, most of the time,” he said. “Or they just glance at it and don’t really notice.”

Customers have been required to sign credit card receipts since the early days of this now ubiquitous payment process. As Taylor’s dog doodle shows, however, signatures just aren’t as important as they once were. Despite being a common practice for centuries, today there are far more reliable methods that companies can use to verify an individual’s identity. As a result, the four major credit card networks recently announced that they will stop requiring signatures to complete transactions. The change will gradually roll out over time and will vary from company to company. For instance, Target plans to eliminate signatures this month while smaller merchants will likely take longer to update their systems.

According to representatives from Mastercard, the industry waited to make this change until cards embedded with computer chips became more common. The major networks also disagreed over the years on which types of transactions required signatures and which ones could do without them. Now the industry is united, with Mastercard’s head of U.S. business development saying that “the signature has really outrun its useful life.” Along with saving consumers’ time, this change also makes life easier for anyone who works at a cash register. “Any extra second is valuable,” said Shayna Ferullo, owner of Snowy Owl Coffee Roasters in Massachusetts. “And everyone knows the signature is a joke. No one really signs any more; it’s all scribbles and squiggles. Some people do smiley faces.”

Questions:

  1. Why are credit card companies starting to phase out signatures?
  2. Do you think signatures have become outdated? Why or why not?

Source: Stacy Cowley, “Credit Card Signatures Are About to Become Extinct in the U.S.,” The New York Times, April 8, 2018.

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