Why Signature-Based Credit Card Verification Needs to Go

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If there’s one thing that’s universally accepted as “security theater,” it’s the requirement to sign a receipt when using a credit card. What was this supposed to do? I imagine there was a time when a clerk would compare your signature on the receipt with the one on your card to confirm your identity. Because, you know, all clerks are actually undercover handwriting experts.

Then it became more popular to buy stuff over the phone with your credit card (admit it, you bought something from QVC or HSN once, right?). And that’s when it became clear that the signature wasn’t needed. Those who didn’t want to believe their credit cards were insecure started writing “SEE ID” on the back of their cards. But the thing was, it wasn’t really stolen physical cards that were the problem. We just didn’t know any better at the time.

Online purchases should have been the death knell for the signature verification portion of retail purchases, but the practice remained. Well, it remained in the U.S.

While the rest of the world was getting credit cards with the newer chip + PIN technology, the U.S. clung to its swipe + sign for far longer than should have been possible. U.S. banks eventually started issuing chip cards but still stuck with the signature for verification instead of a PIN. Think about that. A customer puts their card into a chip reader, is asked to sign and puts their card away, never having the card looked at by the cashier. Why bother? What’s the point?

Credit card issuers agreed. Instead of following the lead of the rest of the world and issuing PIN-enabled cards, in 2018, the banks just said they were doing away with the signature requirement altogether. No worries about the U.S. not getting PINs because the rest of the world has already moved on from using chip cards and now uses contactless payments either with cards or enabled mobile devices (phones, watches, etc.). We finally caught up to the rest of the world with this change, thanks to COVID-19.

In fact, no US credit card issuer requires a signature at the point of sale.

In researching this article, I found an interesting post on Vox that takes a deep dive into the question of why we still need to sign a receipt at some stores. While it’s a few years old, the information hasn’t changed.

The fact that several major credit card networks no longer require signatures — and the fact that more and more shopping is happening online, where signatures are not required anyway — has not changed the reality that a lot of us are still signing a lot of receipts. Small receipts, even!

I bring my concerns to Discover (I do not have a Discover card). “Keep in mind that while Discover does not require signatures anymore, merchants may decide to still require one when customers are checking out,” the rep tells me, adding that if merchants want to transition away from signatures, they “may need to update their point of sale systems.”

So the next time you have to sign to pay for a purchase, know that it’s not the bank that’s requiring it, and it’s also most likely because your store hasn’t updated (or didn’t want to pay to do so) their POS systems.

If you think that having to unlock your phone with your thumbprint or facial scan to make a mobile payment is creepy, I’d hate to tell you what the future holds.

He tells me that while chip technology has ushered in the post-signature age, the real future is most likely in biometrics. “I think we’re already seeing some nudges in this direction with things like Apple Pay,” which uses touch or face ID, depending on the model of the phone. Visa is currently piloting a biometric payment card that recognizes your fingerprint. “That’s really where payments are headed,” he says.

In fact, the technology is already here as you can pay using your palmprint at Whole Foods stores using the Amazon One payment platform.

Is it really that hard to imagine a world where our fingerprints or facial scans are our identification? I have already given my eye scans and fingerprints to CLEAR to get through airport security faster. Why not do the same to my bank to be able to authorize purchases and prevent fraud? What if the technology will allow me to unlock my computer, preventing anyone from unauthorized access?

Final Thoughts

Payment verification through signature is an outdated and unreliable approach that needs to be replaced. The adoption of new payment methods is growing rapidly, even in traditionally signature-dependent industries like restaurants. For instance, QR code scanning through mobile phones is becoming increasingly popular. Moreover, handheld terminals with chip card readers are being used in restaurants globally, allowing customers to pay securely at their tables. It’s time to move away from signature-based verification and embrace more advanced and secure payment technologies.

Companies always make excuses about upgrading technology by saying it’s too expensive or unnecessary. Eventually, they realize the rest of the planet has lapped us with the current tech and agree to upgrade to what everyone’s been using for over a decade. Remember when Chase made a big deal about getting contactless cards?

Eventually, managing to get establishments to do away with signatures is only the first step. Getting POS systems that accept contactless payments (which consistently work) is next and then we’ll only be a few years behind everyone else.

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This post first appeared on Your Mileage May Vary