Kempner: Goodbye, signatures? Credit card firms make big change


UPDATED

Don’t take this too hard: your autograph isn’t worth what it once was.

American ExpressMastercard and Discover have each announced that, starting in April, they will no longer require signatures on any North American credit card purchases. (Actually, American Express is making the change for all its transactions worldwide.)

UPDATE: And now Visa has announced it, too, will cut requirements for signing, though only for merchants set up to handle cards with EMV chips. 

The moves nearly evaporate what may be the most common reason U.S. consumers still bother writing signatures, which were once the most prominent symbol of our financial integrity and proof of our identity. (It’s also another blow to the general use of cursive writing, for those who remember what that is.)

Like lava lamps

“Signatures may be going the way of the lava lamp,” said William McCracken, the president of Phoenix Synergistics, a metro Atlanta-based consumer market research company focused on the financial services.

“They will not be part of Gen Z. Signatures won’t be part of their stored memories.”

The shift away from signatures also hints at the fantasy we all pretended to believe: that signatures actually proved something.

“The industry’s unspoken secret is that signatures on a credit card receipt are relatively worthless from a security standpoint,” McCracken said.

Thieves only had to look at the signature on the back of a credit card, practice it a few times and come up with a fake good enough to pass.

Who even checks?

But even that involves some quaint thinking. Because almost no one in places where we shop or dine is even glancing at signatures these days, whether you signed on paper or a glitchy electronic pad using a faulty stylus or your finger.

That would seem to explain why I’ve never been flagged for using my finger to draw a line across checkout signature pads.

Signatures are still used on plenty of legal property documents, government-issued IDs, artwork, acknowledgments of medical privacy notifications, cards to grandma and anything fans can ask celebrities to scribble on.

Signature challenges

Yet, in other ways signatures have been slipping from the economy.

Instead of putting his “signature” on new dollar bills earlier this year, U.S. Treasury Secretary Steven Mnuchin used a handwritten mix of upper- and lower-cased block letters that could have been thumbed out on a smartphone.

Signatures became less necessary as check writing shrank. And while credit card use continues to grow — there were more than 37 billion U.S. transactions last year totaling $3.27 trillion dollars — most of that is going unsigned.

John Hancocks aren’t required on typical online purchases.

Finger signatures

And credit card firms already scaled back signature requirements on small transactions. More than 75 percent of face-to-face Visa card transactions in North America don’t require people to sign their name, according to a Visa spokesperson.

Which is just as well.

Who hasn’t gone to sign for a credit card purchase using a pen that doesn’t work and “you just scribble anyway,” said Kim Sullivan, the senior director of payments solutions for Georgia-based transactions technology giant NCR.

Dropping signature requirements should speed up lines at retailers, Sullivan said, which is exactly what store owners are looking for.

“It’s going to improve the experience” for merchants and consumers, she said.

“It’s all about faster and frictionless,” she said.

Security concerns

Sullivan guesstimated that eliminating signatures might save an average of three seconds on each credit card transaction. So retailers can increase the number of customers they serve and generate more money, she said.

I imagine some customers may feel a little unsettled with the idea that purchases of hundreds or even thousands of dollars could be made without signing anything.

Security is already the biggest concern people have about using credit cards, said McCracken from Synergistics.

For now, there has been no widespread rush to require use of PIN codes with credit cards transactions in the United States. And some consumers are creeped out about the idea of entrusting credit card companies with personal biometric data that could help verify their identity.

Other security measures are already in place, such as checking the cards’ three- or four-digit CVV number, asking consumers for their billing ZIP code, adding computer chips to more cards and monitoring for unusual purchasing activity.

But the cruelest reality of saying goodbye to our signatures is this: apparently they already have so little value there isn’t a sweeping rush to replace them with something new.



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