Credit Card Signatures Prepare to Face Their Maker

EMV credit cards: Only one of these is chip-and-PIN

By Paul Riegler on 13 April 2018
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For years, I’ve made what I consider to be artistic drawings when asked to sign a credit card receipt, instead of actually penning my signature. Occasionally I’ll resort to “M Mouse” or “Max und Moritz” and I gave one cashier a laugh when I digitally signed Happy Halloween on October 31 and it popped up on her screen. The same goes for checks, yet no one at JP Morgan has ever said boo.

To be honest, I started doing this more for my own amusement and less to point out the ludicrous requirement of a signature to complete a credit-card transaction. I can count the number of people who have looked on the back of any of my credit cards to verify on my right hand and, for some reason, these were always for very small transactions.

Of course, the number of times I sign a check or even use a physical credit card has greatly diminished, mostly thanks to Apple Pay and electronic payment services including Apple Pay Cash. Indeed I may live off my current checkbook for the next decade or two, given the pace at which I write checks to the few remaining anachronistic institutions that exist.

A friend who was the treasurer of a student group at the New York University School of Law would sign checks with the names of Disney characters as well. Those always cleared. However, were he to write the date as DMY versus MDY, the bank would reject it. Ah, those were the days.

Decades later, credit card companies are wising up. The four major companies – American Express, Discover, Mastercard, and Visa – are ending the requirement for signatures for in-store purchases this month.

Indeed, American Express, Discover, and Mastercard will end the signature requirement for in-store purchases starting today, April 13, in the United States. Visa will follow later this month.

The move doesn’t mean that merchants won’t necessarily require a signature after Friday: many still will.

The first “credit cards” were embossed Charga-Plates made from a variety of materials including paper and metal and date back to the 1930s, incorporating a copy of the customer’s signature. Ironically, at least at the beginning, many establishments held the Charga-Plates in the store and clerks would retrieve them when making a sale. Modern credit and charge cards got their start in the 1950s, first with Diners Club and then with American Express and BankAmerica (later Visa), and the magnetic stripe, invented by IBM, was added in the 1970s.

By the 1980s stripes became commonplace but were easy to counterfeit and that led to the development of EMV, which stands for Europay, Mastercard, Visa, and is currently the standard on almost all credit cards. Sometimes referred to as Chip and PIN or Chip and Signature cards, EMV cards are smart cards that use a PIN and cryptographic algorithms to provide authentication.

Meanwhile, cashless payment systems, in particular Apple Pay, are becoming commonplace and eliminating the need for a physical credit card to be presented, as well as a signature or swipe.

Meanwhile, eliminating the need for a signature won’t diminish security and will speed checkout lines.

However, the changes won’t necessarily be noticeable on Friday. Merchants can continue to ask for signatures, although many won’t. The change in signature requirements will vary at each card network. American Express is dropping the requirement globally, while Mastercard is ending it only in the United States and Canada, while Discover’s change applies to those two countries plus Mexico and the Caribbean. Signatures will be optional for Visa cards in North America but only when used by retailers that have EMV-enabled credit card terminals.

(Photo: Accura Media Group)

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