The way consumers authenticate card payments has changed dramatically over the past decade. Chip cards, contactless payments, biometrics, and tokenization have largely replaced handwritten signatures, making transactions both faster and more secure. Mastercard’s decision to eliminate the signature panel from its payment cards reflects this broader shift toward modern payment authentication technologies and the growing importance of digital security.
Well, here’s something that makes sense. Mastercard and Visa are no longer requiring signatures as a point of authentication for card present transactions, so Mastercard has announced that the signature panel on the back of the card is no longer a requirement. As reported in Finextra, most adults weren’t signing the back of their cards anyway:
Mastercard is embracing new modes of authentication across its network, introducing a voluntary programme for banks to eliminate the signature panel on physical plastic, and enabling token services on all cards by 2020 for shopping online.
Mastercard says the removal of the signature panel on the back of cards is in tune with changing consumer preferences. It points to a survey conducted among 1000 US adults which found that only 40% said they had signed the back of their cards, and one-third of those who haven’t signed said they don’t see the point in doing so.
With this announcement, Mastercard took the opportunity to tout various new authentication and much more secure options available including its token services, likely in response to Visa’s big announcement on October 17, regarding its partnership with merchant processors to extend tokenization services to merchants for card not present transactions:
In the online space, Mastercard is also pushing the adoption of new security technologies to streamline the shopping experience at the checkout. In early 2019, the card scheme in partnership with payment processors, banks and merchants will introduce one-time tokens to obviate the need for tedious and repetitive input of cardholder information.
With token services, consumers can store their card credentials with a merchant or retailer without the risk of exposing actual card account details. It also prevents service disruptions by automatically updating card credentials should a card expire or need replacement.
Removing the signature panel is more than a cosmetic change—it signals how far the payments industry has progressed beyond legacy authentication methods. As tokenization, biometrics, and digital identity solutions become standard, payment networks are focused on reducing fraud while improving the customer experience. The continued expansion of payment authentication technologies will help financial institutions, merchants, and consumers benefit from stronger security without adding friction at the checkout.
The company is working with Adyen, BlueSnap, Digital River, Stripe, Square, Worldpay and Mastercard Payment Gateway Services to extend tokens to thousands of retailers. It is also working directly with issuers such as Citi and Fifth Third Bank to convert cards on file into tokens. The card scheme is additionally working with Bank of America to provide enhanced fraud scoring to help increase approval rates over time.
A link to Visa’s announcement on tokenization can be found here.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group