In October of 2015, the United States joined other developing countries in introducing EMV credit cards to customers and merchants. Named for the three companies that developed the microchip technology — Europay, MasterCard, and Visa — EMV credit cards contain encrypted information that is meant to increase security and deter credit card fraud.
EMV cards won’t eradicate credit card fraud completely, but they do make it more difficult for con artists to obtain credit card information due to the unique, transaction-specific encryption that occurs with each purchase made on these cards. Unlike the magnetic stripes that store static information, the microchip encryption is ever-changing, making obtaining credit card information or cloning a card a more onerous process for a criminal.
These cards feature a two-step authentication process that involves scanning the chip followed by entering a personal identification number (PIN) or providing a signature. With so many numbers to remember, some cardholders find the transition to chip and PIN cards difficult. While chip and signature cards require an extra step in the card-present transaction process, a signature still goes a long way toward preventing fraud, which is why credit card companies still require them in many instances.
“Invalid if Not Signed”
Image via Flickr by Wiertz Sébastien
Technology keeps moving forward at an astounding pace, and it may seem like certain good old-fashioned practices will become extinct, such as the simple act of signing a name for the purchase of merchandise or a service. But credit card companies still value a customer’s “John Hancock.” Cardholders will still find a space for an authorized signature on the back of their cards along with words such as “Not Valid Unless Signed,” which indicates that a signature is still important when it comes to authentication and security.
The Paperless Shift
Whether the purpose is environmental conservation, reducing archival space requirements, or convenience, there is a distinctive shift away from paper documents. Digital documents with electronic signatures are now more commonly accepted as trusted, official documentation. This includes point-of-sale transactions where signed paper receipts are being phased out in favor of electronic signatures.
Forging a signature is part of a credit card thief’s arsenal, but as authentication processes become more savvy and secure, it becomes more difficult for con artists to have their way with a cardholder’s signature. This is because digital signatures use various algorithms and decryption processes to increase security and help prevent fraud.
Some credit card companies do not require a signature for purchases under a certain dollar value. For larger purchases, a signature may be required. In the event of credit card theft where a fraudulent transaction is made at a store, the credit card company may request that the merchant produce a copy of the receipt in order to compare signatures. If a dispute occurs between a cardholder and a merchant, a signed receipt can be used to determine whether or not the customer actually signed for the particular purchase.
Credit card companies, banks, consumers, and merchants are all hurt by credit card fraud. No one wants to shoulder the associated costs, but of course, someone has to be held responsible, aside from the perpetrators themselves. The international move to EMV cards has forced merchants to keep up with the technology in order to ensure security. Companies that are not EMV-compliant risk having fraud charges fall back on them. As noted above, a signature can help protect merchants from paying for the consequences of a fraudulent transaction.
Not all vendors in the United States have moved to EMV technology. In particular, gas station vendors have until 2020 to become EMV-compliant. This means that they may require signatures on credit card purchases made at the terminal, regardless of what kind of EMV card is presented.
A signature on a credit card or on a credit card purchase receipt is about more than just proving the identity of the cardholder. It is also an important step, along with other forms of authentication, in the battle against credit card fraud. Technology continues to move forward, but each stroke of a credit card holder’s signature still has value.