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Payment methods are evolving faster than ever and because of that fraud prevention methods are being forced to evolve as well. Recently, we’ve seen MasterCard drop its signature requirement and not too long after Discover followed suit as well. Now, American Express is the newest major credit card payment network to drop the signature requirement. Only this time they’re going to be dropping the signature requirement all around the globe. The new changes will come into effect in April 2018.
Here’s the text straight from the press release:
American Express today announced it is eliminating the requirement for merchants to collect Card Members’ signatures for all purchase transactions at the point of sale beginning in April 2018. The move, which applies globally to all American Express-accepting merchants, will help provide a more consistent and simplified checkout experience for merchants and Card Members in regions around the world, speed up the process of paying in store and help reduce merchants’ operating expenses associated with retaining signatures.
The idea is to make transactions more convenient and efficient for customers and help save costs that merchants incur to retain the signatures, pretty much the same justification put forth by the other payment networks, MasterCard and Discover.
American Express went on to comment:
“Our fraud capabilities have advanced so that signatures are no longer necessary to fight fraud. In addition, the majority of American Express transactions today already do not require a signature at the point of sale as a result of previous policy changes we made to help our merchants.”
(The majority of transactions already don’t require a signature because Amex previously limited signature requirements for transactions at the checkout that are under $50 in the U.S., under $100 CAD in Canada, and under £30 in the U.K.)
American Express also commented on how specific advancements in the payment industry have made signatures no longer necessary.
The need for signatures has declined around the world due to a number of advancements in the payments industry. These include the growth of contactless payment options, including card-based and mobile tap-and-pay methods, the global adoption of EMV chip technology, and the continued expansion of online commerce. American Express has also deployed advanced machine learning algorithms that allow for more precise detection of fraud while minimizing disruption of Card Members’ genuine spending.
I think most people are in favor of these changes. For a long time, collecting signatures after transactions has seemed like more of a ritual than a meaningful safeguard against fraud. I understood that sometimes those signatures could come in handy to provide proof of authorization but now signatures just feel obsolete as a verification method. I anticipate a message from Visa pretty soon that they are also going to drop signature requirements and then we’ll be one step closer to not having to sign any more for any credit card payments.
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Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned full-time credit card rewards/travel expert and has earned and redeemed millions of miles to travel the globe. Since 2014, his content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, US News, and Business Insider. Find his full bio here.