Making Sense of Security: Signatures and Credit Cards
As of January 12, 2018, all of the major card brands have made announcements and changes to allow merchants to choose to process payments without a customer signature starting in April 2018. The decision to process payments without requiring cardholder signatures is optional, regardless of the amount of the purchase.
There are slight variations by card brand, but, in general, if a merchant is EMV capable, then obtaining a signature from the cardholder (electronically or on paper) and printing a signature line on a receipt is optional.
Only Visa requires that the merchant be EMV capable to exercise this option. Since this is a requirement of Visa, it would make sense to follow this guideline for all card brands. Merchant Link believes consistency in the payment experience is important for the merchant employee and for cardholders, and, as a result, does not recommend making customer signature rules specific to a card brand, but rather recommends that merchants apply the same rules to all payments.
Some of the card brands believe that there are some business cases where signatures may still be valuable (or, possibly, actually required in some jurisdictions). Each merchant should decide for itself whether obtaining a signature provides value or is a legal requirement in the jurisdiction(s) in which it operates). Also, some typical scenarios where signatures may continue to be useful include when tips are obtained, services charges are added, or there is a complex return or exchange policy with the merchant. In those cases, obtaining a signature on a merchant receipt could still provide some value to the merchant if a dispute occurs.
The availability of the option to not require signatures has resulted in some minor changes in chargeback processing, receipt printing, and receipt retention requirements. For merchants who choose to stop requiring signatures, their printed receipts would not have to include a signature line. For Visa, a chargeback notice or request will eventually no longer have to provide printed receipts or signed receipts as a fulfillment request. Eventually, even printing a merchant receipt and retaining for later chargeback defense may not be required. However, it is still acceptable to print the receipt, and use it for reconciliation, or end of day settlement drops, or other legitimate purposes. For tipped employees, a receipt with the added tip amount is most likely still going to be required, and, as stated, it may make sense to have the cardholder sign that receipt as well.
If you require more information on how these changes impact you as a merchant, or how these changes impact chargeback processing and related matters, please reach out to your Acquirer/Processor contacts.
Suppression of signature lines on receipts, as well as turning off a signature requirement in a payment terminal, likely will require changes in POS/PMS applications and systems, and reconfiguration of payment terminals. Once Merchant Link has completed development and testing, Merchant Link will publish information on how to implement the necessary changes in Merchant Link products to accommodate the removal of signature requirements.
All Card Brands: US / Canada
American Express – Effective date April 2018
American Express – Regions, Global. However, merchants must continue to collect signatures if they are required to do so by applicable law in a particular jurisdiction.
Discover – Effective date April 13, 2018
Discover – Regions US, Canada, Mexico, Caribbean
Discover – For transactions after April 13, 2018, issuers will no longer have the ability to initiate UA01-Fraud-Card Present Disputes for failure to obtain a signature. All other dispute rules may apply.
Mastercard – Effective Date April 13, 2018
Mastercard – Modify existing text to clearly state that the merchant’s refund policy printed on the paper or email receipt offered to the cardholder in a face-to-face environment will govern in the event of a dispute.
Visa – Effective Date April 14, 2018 signature becomes optional
Visa – April 14, 2018 Visa EMV Enabled merchants no longer required to keep receipts
Visa – April 14, 2018 Acquirers no longer required to fulfill retrieval requests for transactions with Terminal Entry Capability of 5 (EMV) after this date
Visa – October 13, 2018 Issuers may no longer request copies of transaction receipts nor raise compliance cases for validity or presence of signature for transactions at EMV-enabled merchants.