No signature required transactions

Introduction

You may have noticed that sometimes you swipe your credit card and don't need to sign the receipt. This is not because the merchant is being lax with their payment processing procedures but rather because the card associations allow many merchants to forego cardholder verification for specific transactions.

The purpose of this program is to improve the customer experience and speed up checkout times on purchases that traditionally have been paid for with small amounts of cash. There are limits on transaction size--typically $50--and merchant type to reduce the impact of a fraudulent transaction without a signature. A merchant's eligibility depends on the type of business they conduct but the majority of merchants are eligible. Which merchants are eligible varies by card association but there are some, like gambling merchants (MCC 7995) which are universally not allowed to perform transactions without a cardholder's signature.

One of the implications of this is that there are certain situations when disputing a chargeback where the merchant is not required to include a cardholder's signature as proof of sale.

Example: Quick service restaurants

Quick service restaurants (QSRs) are a good example of a merchant that relies on fast and convenient checkout processes. Below is each card association's maximum transaction amount a QSR can sell without needing a cardholder's signature:

  • Visa: $25[1]
  • MasterCard: $50[2]
  • Discover: $50[3]
  • American Express: $50[4]

No signature required transaction size nuances

$50 is the most common maximum transaction size for these programs although card associations will make exceptions for some merchants. Visa's Easy Payments program requires most transactions to be below $25 but they allow for cardholders to make a transaction of up to $50 at a supermarket (MCC 5411) or a discount store (MCC 5310) without needing to sign.[5]

Conversely, Visa's Easy Payments allows only a maximum transaction size of $15 before needing a signature in most unattended environments (like an automated checkout kiosk).

References

  1. Visa Easy Payments FAQ
  2. Fact Sheet: MasterCard Quick Payments System
  3. Discover Acquirer Operating Regulations 2016_10_14' Section 12.10 (p. xviii)
  4. American Express Merchant Operating Guide April 2016 p. 27
  5. Visa Easy Payment Service