Visa and MasterCard join forces to ban the signature

By Mozo ·

In September 2013, business rivals Visa and MasterCard received interim authorisation from the ACCC to work together on a campaign to phase out signatures for transaction on Australian issued chips cards under a plan called PIN@POS.

Visa and MasterCard have estimated that 45% of credit card users still choose to sign for purchases. Their goal is to have 90% of of sales approved through the use of a PIN because "it is much more difficult for a fraud perpetrator to ascertain a PIN than to forge a signature."

Historically, signature has been the main form of payer verification however, the pair claim that "merchant acceptance practices have become increasingly lax when it comes to verifying the signature on the transaction receipt."

It's expected that the widespread adoption of the PIN at checkout would see a major decline in fraud perpetrated through the forging of signatures. Keen to reduce the amount of money lost through fraud each year, the major banks are supporting the move.

The schemes and financial institutions will jointly fund and coordinate the campaign. Visa had originally scheduled to phase out signature in April 2013 however was forced to push the date back as financial institutions believed the time frame to be unachievable and confusing if the two major schemes did not work together.

The ACCC is therefore deliberating on an industry-wide approach as "a single message from the industry is likely to lead to less confusion for customers and merchants," according to ACCC commissioner Jill Walker.

The permissions from the ACCC will allow card issuers to send consistent messaging to their cardholders to encourage them to use a PIN rather than signature as a means of verifying identity. The pair will brand campaign an "industry security initiative" and use the BUYSafe and PINWise graphic devices which include the logos of American Express, Diners Club, MasterCard and Visa.

The move will effect just under half of all Australians who are still choosing to sign rather than use a pin when paying for goods and services. Concern has also been raised by cafe and restaurant owners who will be forced to invest in new wireless Eftpos machines or ask their customers to pay at the counter.

If the campaigns commence as expected in early 2014 Australia would be joining a long list of other countries already transitioning to a universal PIN usage. However, other pin-less payment methods such as Visa PayWave and MasterCard's Pay Pass, online digital wallets and mobile app payments should not be affected.

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