Card networks no much longer require signature verification. What walk this mean for your small business?


Collecting receipt signatures is optional if you have actually an EMV-compliant credit card reader. EMV cards are also known as chip cards, because the information around the map is save on computer in a chip together opposed to a magnetic stripe. EMV is much more effective than receipt signatures for deterring credit transaction card fraud. Since 2015, EMV-compliant merchants have seen counterfeit fraud drop 76%, follow to Visa.Receipt signatures may still be helpful for some small businesses, such as restaurants that usage receipts to collect tips, or company professionals that use them together proof of approval for work orders or for accept of perfect work.

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This write-up is for small business owners interested in options to asking customers because that signatures on credit transaction card and also debit map transactions.

Many sellers breathed a sigh that relief as soon as Visa, Mastercard, Discover and American to express announced they to be no much longer collecting signatures on credit card or debit map transactions due to the development of EMV technology. In this guide, we'll enter detail around what a credit transaction card receipt is, what info is had on a receipt, why client signatures were forced in the an initial place, the security standards that change the signature, and also practical tips the cardholders deserve to implement to store their cards the end of the dorn hands.

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Tip: check your credit transaction card service agreement for any kind of clauses about receipts and also recordkeeping.

Why were customer signatures required?

For decades, credit card service providers relied top top receipt signatures to protect against fraud. They required merchants come collect and also store customer signatures so that if a transaction to be disputed, the merchant could produce a signed receipt prove the customer to be physically in the store and also personally authorized the purchase. Without this proof, merchants were top top the hook for losses because of chargebacks. Lock were likewise liable if the signature ~ above the receipt didn't enhance the signature on document or on the card. With the advance of EMV-compliant card readers, chip readers have replaced client signatures. 

Chip reader replacing client signatures

In 2015, credit card companies began issuing chip cards to consumers. This change liability for counterfeit fraud occurring at the point of revenue to merchants who hadn't yet upgraded come EMV-compliant map readers. This laid the groundwork to transition away native signatures, due to the fact that chip cards and also digital wallets have advanced anti-fraud technologies – such as tokenization and also biometrics – to authenticate transactions. This an innovation renders credit card signature requirements obsolete.

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Did friend know? EMV is not just a technology, however a brand. Europay, Mastercard, and also Visa, known jointly as EMV, is a an international brand that started in the 1990s, with the objective of eliminating credit transaction card fraud.

Should your service stop questioning customers to authorize credit map receipts?

Even though large retailers conveniently dropped their credit card signature requirements adhering to the map brands' announcements, part merchants proceed to collect customer signatures top top debit and also credit map transactions. accepting credit transaction card payments by analysis our guide.>

Before you decide which choice makes the most sense for your business, here are a few factors come consider. 

1. Is your organization EMV compliant?

If girlfriend haven't however updated your credit card reader to EMV-compliant models, you aren't eligible come skip signature verification for Visa and also Discover transactions. 

Visa reports that, together of march 2019, 75% that U.S. Shop have embraced EMV technology. That leaves 25% that have yet come upgrade your systems. If you're quiet holding out on EMV technology, speak through your credit transaction card processor around updating her card reader. In enhancement to permitting you to stop collecting receipt signatures, it significantly lowers your threat of counterfeit credit transaction card fraud at the suggest of sale. 

Despite the lack of a signature necessity for the previous year, EMV modern technology has been effective against fraud. Visa reports that, as of September 2018, EMV-compliant merchants have actually seen counterfeit fraud fall 76% due to the fact that September 2015. EMV has actually increased in popularity for merchants and consumers. Currently, EMV accounts because that 86.1% that in-store transactions. best credit card processing for her business? check out our reviews and also top picks.> 

2. Does your POS system allow you to get rid of signature authorization for credit card transactions?

If you currently have one EMV-compliant credit card terminal or card reader, the next step is to check with her POS mechanism provider to find out if the software has actually been updated to eliminate this step from the checkout process. 

Many POS providers have updated their solution to allow merchants pick whether or no they want to continue requiring client to sign for purchases. Some, like Square, offer multiple receipt signature options. You can choose to constantly require receipt signatures, never require receipt signatures, or only require receipt signatures because that transactions end $25.

Editor's note: searching for the best credit map processor for her business? Fill out the below questionnaire to have our vendor partners call you around your needs.

 

3. Go your organization use signatures for proof that approval?

If your company uses receipt signatures for various other purposes, such as giving a occupational order, accepting completed work, or agreeing to a sales policy (such together "all sales space final"), you may need to save collecting receipt signatures. 

Writing for 360 Payments, Lisa Coyle says, "Even if you decide that you are prepared to perform away through them on your EMV credit card receipts, friend may discover value in adding a signature necessity to your contract or work-related order. Signatures are good for much an ext than authorizing a credit card transaction." 

Restaurants are likewise likely to proceed requiring receipt signatures come encourage tipping. If, because that instance, your business is a sit-down restaurant the doesn't have a pay-at-the-table option enabling patrons to add a tip before paying the bill v a card, it more than likely doesn't make feeling to forgo receipt signatures. It's less awkward come ask customers to sign file receipts with pointer prompts than to ask them the lot they desire to tip before you charge their credit transaction cards. 

4. Room you nervous about chargebacks or credit transaction card fraud?

All merchants may be nervous about chargebacks or credit transaction card fraud. Vendors who have adopted EMV-compliant technologies have to be much less concerned. In ~ the start of EMV-compliant modern technology in 2015, doubters worried the chip-and-sign process was less secure 보다 the chip-and-PIN. Unequal magnetic-stripe cards, which source in the 1960s and are borderline obsolete today, chip cards are almost impossible come duplicate. This reduces credit transaction card fraud and also increases authenticity. Likewise, because of EMV's heightened anti-fraud modern technology and increased security, merchants have actually less liability because that a chargeback. 

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Key takeaway: It's still good practice to authorize the ago of her debit or credit card, also if it's no longer required, as one of several an individual safety measures you deserve to take to store your map secure.

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Trish Petak and also Stella Morrison added to the writing and research in this article.