Say Goodbye to Credit Card Signature Requirements

The last major credit card issuer says they’ll phase out signatures this year.

Visa kicked off 2018 with a major announcement about credit transactions using their cards. This year, they say they will phase out credit card signature requirements for most transactions. With this announcement, they join American Express, Discover and MasterCard, who all went no signature required last year.

Why credit card signature requirements don’t matter anymore

Don't expect credit card signature requirements at checkout this yearAlthough EMV chip technology got off to a bumpy start, it was always intended to replace swiping your card. The only problem was that both merchants and retailers complained that the technology was slower and more cumbersome, slowing down transactions at checkout.

Now, however, statistics prove that EMV chip technology works to reduce credit card fraud. According to Visa, there was a 66% drop in fraud cases for them between June 2015 and June 2017. And, as customers and merchants become accustomed to the technology, complaints have dropped, too.

All of this means that EMV chips are here to stay, and that technology doesn’t require signatures. In fact, it replaces signatures with a technology you’re already familiar with thanks to your debit card – PIN numbers. Card users in most other countries use PIN numbers instead of signatures on EMV chip cards. Major U.S. credit issuers are likely to bring that technology here.

Will PIN numbers prevent fraud for you?

Let’s be honest. Most checkout clerks rarely check your signature versus what’s on the back of your card. To the point, you may or may not even have the signature strip signed on the back of your cards. So, signatures haven’t been an effective means of preventing fraud for a while.

“It makes sense that PIN numbers have shown such a dramatic decrease in third-party fraud cases worldwide,” Gary Herman, President of Consolidated Credit, explains. “But that doesn’t make EMV chip cards fraud proof. Just like with your debit card PIN, you need to be extremely careful about who you tell your PIN number.”

Herman’s concern is that cases of in-family fraud may increase with the adoption of PINs. If a teen child gets a hold of your PIN, they can enjoy a spending spree with your card.

“Most teens don’t understand the cost of using credit,” Herman continues. “They look at credit cards as free money. The adage ‘Buy now, Pay Later’ makes it seem like the payment is just delayed. It doesn’t say anything about the fact that ‘Pay Later’ also means pay more.”

To Herman, this means there’s even more need to teach your children about credit early. Teaching them to use credit responsibly is often a better strategy than keeping them completely away from credit. You show them how to use credit the right way so they have time to develop good habits.

Press Inquiries

April Lewis-Parks
Director of Education and Public Relations

AParks@consolidatedcredit.org
1-800-728-3632 x 9344