Do Chip Credit Cards Eliminate the Need for Signatures?

Do Chip Credit Cards Eliminate the Need for Signatures?

December 11, 2017         Written By Bill Hardekopf

Earlier this year, Mastercard and Discover announced they would no longer require signatures for credit card purchases starting in April 2018. Today, American Express revealed they will also be eliminating signatures next year.

Getting rid of signatures will speed up transaction times and make shopping more convenient for consumers. Jaromir Divilek, Executive Vice President of Global Network Business for American Express, said, “Our fraud capabilities have advanced so that signatures are no longer necessary to fight fraud.” This mainly refers to smart chips available in most credit and debit cards on the market.

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According to Linda Kirkpatrick, Mastercard’s Executive Vice President of U.S. Market Development, over 80% of MasterCard transactions are now completed without a signature. Many retailers have stopped requiring signatures for purchases under $25 or $50. Credit card companies are simply looking to extend that option to all transactions.

Are chip-enabled credit cards really secure enough to not require signatures? After all, signatures aren’t very secure. The only way they help is if the consumer disputes an unauthorized charge and verifies the signature used for the transaction is fraudulent. Most retail workers will not compare the signature on a card transaction to a person’s credit card, and customers often write a squiggled line just to get through that step.

Last year, Discover made a big push to replace all signature requirements with PINs instead. PINs are unique to each user, and can be changed at any time to prevent fraud. PINs do not require verification from a cashier, but they still confirm a person’s identity. If fraud becomes a problem after removing the use of signatures, American Express, Discover and Mastercard could require PINs for large transactions instead.

The information contained within this article was accurate as of December 11, 2017. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


About Bill Hardekopf

Bill Hardekopf is the CEO of and covers the credit card industry from all perspectives. Bill has been involved with personal finance for over 15 years. He is a frequent contributor to Forbes, The Street and The Christian Science Monitor.
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