Don't Sign Here Please

Visa just announced the expansion of their No Signature program. Citing its "popularity", Visa notes that: "According to a Visa Inc. survey, 69 percent of participants surveyed cited either convenience or speed as the primary reason for using their credit or debit card."  Wow.

What this seems to signal is that Visa, and perhaps the other card brands, feel that they will make more money by eliminating barriers to the sale, such as the 2.2 seconds needed to sign your name, than it would lose in fraudulent transactions, considering this program is for transactions of US$25 or less. Also, it appears that people no longer know how to sign their names.

I have often heard (in low, barely audible whispers) that US consumers were too lazy to care about security, which is why the US will probably never have CHIP and PIN transactions for enhanced credit card authentication.  We Americans are too darn busy to push 4 numbers on a key pad (4.3 second).  This drives folks in the other parts of the world crazy as they are in love with CHIP and PIN and, mistakenly, think that this technology eliminates all transaction risk.  CHIP and PIN cards still have a mag stripe that can be scanned, and skimming is still a problem. It's a great authentication method, however, and would really help reduce some of the smaller, card-present CC frauds were we to adopt it.

Americans need more paranoia about credit card theft. We are much more likely to suffer some type of credit card fraud or be affected by a major credit card breach than a terrorist attack, but for some reason we are unwilling to punch in a few numbers to help protect ourselves.

The literal bottom line of the Visa announcement is this:

"Offering the No Signature Required program will allow hundreds of thousands more U.S. retailers, including traditionally cash-heavy merchants such as discount stores, to enjoy greater benefit from card acceptance on low dollar transactions.  These benefits include the potential for faster payment, increased sales and operating efficiencies they don't get from cash and checks."

This targets smaller merchants who don't understand security.  Hope it works out for them.



re: Don't Sign Here Please

Hey John,
You gotta love the paradox. They want the revenue and then they want their merchants to improve security. There is a disconnect in there somewhere, no?
Thanks for the post,

re: Don't Sign Here Please

This announcement is consistent with what we are hearing from our customers and what we have seen in the market. Allowing no signature required purchases does not expose the merchants and issuers to excessive amounts of risk, so it is no surprise that these services are being expanded as they make it easier for consumers to get through the checkout line.

The truth of the matter is that, here in the US, the amount of scrutiny used when comparing the signature on the card with the actual signature of the consumer is minimal. The average clerk doesn’t spend a lot of time comparing signatures.

Regardless of whether the consumer signs the receipt or not, companies need to follow the same measures when tracking for fraud. Rules need to be set on the back end to ensure the fraud detection solution is identifying abnormal purchases across multiple channels in real-time to detect and prevent fraud.

Most fraud is committed by large groups or organizations, so the risk of fraud on this level is minimal. Keep in mind; most card fraud groups are well organized and sophisticated. They won’t use a stolen credit card to charge up numerous twenty dollar purchases; nor are they likely to walk into a high end retail store and make high dollar purchases on stolen cards. Fraudsters are starting to work the middle ground between micro payments and macro payments, usually above the $25 dollar range. That being said, fraud is a real issue and it remains important for retailers and issuers to have advanced fraud detection systems in place to track for purchases that are out of the norm.

David Nussenbaum
Vice President, Global Risk Products
ACI Worldwide