subject: Visa Goes Cardless [print this page] This week, Visa made an announcement stating that starting this summer it's not going to require signatures for transactions of twenty five dollars or less. It will most likely bear the results of faster and smoother transactions but it could also chip away at the payments industry's effort to move toward contactless technology.
The new policy takes effect in July and makes about ninety eight percent of more than eight hundred United States merchant categories in Visa's system able to take their cards that are issued by U.S. banks with no signature. This opens the waiver to a ton of additional merchants and extends Visa's current no signature rule which covers only twenty six merchant categories.
Visa believes that the new policy means faster and more convenient payments for people who have cards, and according to a survey, sixty nine percent of respondents claim either convenience or speed is the main reason why they utilize a card. Additionally, the new policy might help issuers get into the cash dependent markets. Actually, seventy five percent of cash transactions in the United States are less than twenty five dollars!
However, this move towards no signatures may trump the credit industry's move towards contactless payments, which would speed up card transactions and prep the world for mobile payments.
Contactless technology involves radio waves transmitted by a special equipped chip card and takes away the need for a card swipe while decreasing the time it takes to make a sale.
Visa does not see a conflict of interests, claiming that it's contactless technology and its no signature rule can co-exist peacefully. It says that these are complementary, with no signatures paving the way for contactless sales. For them, going signature free is just a first step towards the newer technology.
