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Signing off: Credit card giant ditches pens for PINs

Visa is abandoning signatures in favour of PINs in a bid to boost credit card security.

Visa is abandoning signatures in favour of PINs in a bid to boost credit card security. Photo: Justin McManus

The days of signing your name to verify your identity when shopping with a credit card could be numbered, with credit giant Visa deciding to phase out pens in favour of PINs.

From April 1, 2013, all Visa card transactions will be approved by customers using personal identification numbers instead of signatures.

The move is expected to reduce signature-based credit card fraud which has been on the rise over the last two years - from 38 out of 100,000 transactions in 2010 to 52 out of 100,000 transactions in 2011.

Visa spokeswoman Judy Shaw said the change was part of a comprehensive security plan to phase out the use of signatures in favour of PIN and card chips, which are already widely used by customers in stores and ATMs.

"At the moment we're working with financial institutions and other card schemes to discuss a uniform approach to chip and PIN use across the industry," she said.

"It will include a communication program so that cardholders are aware of their PINs and know how to use them," she said.

But rival American Express will still allow customers to confirm purchases with signatures although cards are issued with chips.

‘‘We’re giving our members both options as we understand that every person has their own preferred way of using their credit card at the point of purchase," said a spokeswoman for the company. The spokeswoman noted that American Express has one of the lowest instances of fraud in the industry.

MasterCard has been contacted for comment.

The change by Visa will also affect 14,000 cafes and restaurants, where customers will no longer be able to sign their bills at the table.

"Right now you're used to putting your credit card into the black folder and then expecting the waiter to take it and process it," said Garry Duursma, vice president at eftpos services company Tyro.

"By the time this mandate comes in, you're going to have to get up and go to the cashier and make the payment or the cashier armed with a payment terminal has to come to you."

Australia's banking and payments industry is expanding the choice in payments methods, as customers embrace more digital banking options. At the same time, banks are racing to upgrade their processing abilities, while working to ensure the overall security of the system. Australian Payments Clearing Association showed that fraud losses reached a record $278 million in 2011.

Mr Duursma said abandoning signatures will reduce the incidence of card-based fraud, although it could potentially open a new risk if the restaurant's eftpos system isn't properly integrated with the restaurant's bank account system.

167 comments

  • What about tipping? I prefer to sign and leave a tip. When im forced to use a pin I cant leave a PIN.

    Commenter
    Steve
    Location
    Sydney
    Date and time
    October 25, 2012, 11:26AM
    • There is no need to leave tips in this country. We are not the USA
      Waiters and Waitress are paid adequately in Australia

      Commenter
      Peter Scott
      Location
      Melbourne
      Date and time
      October 25, 2012, 11:37AM
    • Tip with cash mate... I do that with cabbies all the time - pay by card and give some coins or a fiver tip. I doubt Peter has ever been a waiter...

      Commenter
      David
      Location
      Tas
      Date and time
      October 25, 2012, 11:51AM
    • Over here if you pay by credit or debit, the machine will first ask you to confirm the total amount and then ask if you want to tip 10, 15 or 20% or enter an amount to tip.

      Commenter
      Josh
      Location
      Montreal
      Date and time
      October 25, 2012, 11:52AM
    • It will be up to the EFTPOS providers to sort out a way to do tipping. I believe there are pay at table solutions available that incorporate a tipping feature, however they need to be integrated with the restaurant's POS. The workflow as i understand it is the EFTPOS terminal is given to the customer to swipe their card and enter their PIN. Before they do this there is the option on the terminal to add a tip to the bill. It's going to be a huge change to the work flow, but will mean cardholders won't lose site of their card. It should also mean faster turnover for restaurants, as the payment can be processed at the time the bill is requested.

      Commenter
      pete
      Location
      Sydney
      Date and time
      October 25, 2012, 11:53AM
    • Exactly right Peter Scott. We already pay enough for everything in this country because staff are paid adequately in the first place. There is no need for tipping in Australia.

      Commenter
      Fat Cat and Friends
      Date and time
      October 25, 2012, 11:56AM
    • A friend of mine from IBM and I had lunch in a Canberra restaurant. We split the bill and gave our AMEX credit cards to the waiter, signed the bill and put our credit cards in our pockets. When I got my statement I saw a lot of transactions I didn't recognise. I contacted the IBM executive and we realised we'd been active users of each others' credit cards for over a month. And in all that time, with all of those signed receipts, neither we nor anyone else had noticed the wrong signatures!

      As for tips - I once paid for my meal at a restaurant in Port Melbourne using my AMEX. As I walked out I thought my bill couldn't be that large, so I went back. The short of it is that the staff had added a $30 cash out onto my bill.

      Never use a credit card in a restaurant or a taxi!

      I nowadays have no credit cards (yes I have a debit card, but don't carry it) and I pay for everything in cash. It's the plastic that always works.

      Commenter
      Yours Truly
      Date and time
      October 25, 2012, 12:01PM
    • Peter - what if you actually WANT to tip, and reward the good service?? I guess you can always leave cash....that way it's a given that the staff with the money - not the business.

      Commenter
      CH
      Date and time
      October 25, 2012, 12:05PM
    • The same way you do now. Restaurants can activate a EFTPOS "tip" feature. It allows a later Tip to be "appended" to the original sale. Many do it now.

      Commenter
      Paul
      Location
      Sydney
      Date and time
      October 25, 2012, 12:07PM
    • eftpos terminals (including totally cordless and wireless ones) do actually have a function for allowing tips. It just has to be setup on the actual device, and can be done with one easy phonecall to your merchant services line.

      the restaurant could also have an online merchant, where they are basically connected to the web, and enter in your credit card number, just like they would if you paid for something over the phone. It then doesn't require a signature then, and you could still leave a tip.

      Commenter
      well actually
      Date and time
      October 25, 2012, 12:08PM

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