Why credit card signatures are poised for elimination: 6 things to know

Credit card networks American Express, Discover, Mastercard and Visa are set to end the policy of requiring signatures to authenticate a person's identity, reports The New York Times.

Here are six things to know.

1. The four credit card networks plan to no longer require credit card signatures to complete transactions, effective later in April.

2. More specifically, American Express will eliminate the signature requirement globally on all cards, while Mastercard is nixing the requirement in just the United States and Canada, according to the report. Discover is eliminating the signature requirement in the United States, Canada, Mexico and the Caribbean. As for Visa, The New York Times reports signatures will be optional in North America for retailers where customers can use chip cards.

3. However, the publication states retailers will still have the option of collecting signatures if they choose to do so. At least one retailer — Target — plans to get rid of signatures in April. Additionally, Walmart spokesperson Randy Hargrove said in the report the company still records signatures on some transactions but plans to completely eliminate them soon.

4. Mark Horwedel, the chief executive of the Minneapolis-based Merchant Advisory Group, a trade group of merchants, said he anticipates 75 percent of MAG members will no longer require signatures by the end of 2018, according to The New York Times.

5. Credit card networks at least partially attribute the elimination of signature requirements to the commonality of adding computer chips to cards. The chips generate distinct codes for each transaction and are used as a fraud prevention measure.

6. With the elimination of credit card signatures, only certain instances, such as a large transaction like a house purchase, would require handwritten authentication, notes The New York Times.

Read the full report here.

 

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