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Checkout lines are about to get faster

Ethan Wolff-Mann
Senior Writer

When the chip and pin credit cards took over, they added security to a famously insecure system. Instead of a magnetic strip, the chip provided much-needed encryption to combat fraud. But the signature part of the process has remained — until now.

Visa, MasterCard, Discover, and American Express will stop requiring signatures for credit card transactions. Target and Walmart both plan to get rid of the process as well, the New York Times recently reported.

The calculus for these networks is simple: no one actually looks at these signatures, and even if a person signed, “Please help me get out of this awful date,” the server or bartender would never notice. Coupled with credit card chips’ security features, getting rid of signatures is not even really a trade-off, but rather a trimming of the fat.

But there’s a big boon here for stores and customers: check-out times should drop and lines should get shorter.

Chip cards already are slow, and processing companies have been hard at work to make sure a long wait when you insert a chip card doesn’t sully the brick-and-mortar shopping experience. Square has gotten the chip card processing time down to 3.6 seconds, for example.

“We just keep iterating and making it as fast as we can,” Square (and Twitter) CEO Jack Dorsey told Yahoo Finance last year. “Most of our competitors are 11 seconds right now. It’s just bad engineering. The chip card wait time is terrible.”

Getting rid of signatures on low-value transactions under $25 has been more common as a way to further trim the wait. At no-cash establishments that usually don’t have charges over $25 — coffee shops and fast casual restaurants, for example — the signature-free process is impressively fast. It’s close to the speed in the “Life Takes Visa” commercials.

Not everyone will be participating, however. Retailers could always go the extra step and ask customers to sign, even if Visa doesn’t require it. In fact, Square is not planning on providing the signature opt-out for retailers, unless the transaction is under $25 — the policy that’s currently in place.

Square told Yahoo Finance that the move to keep signatures for now isn’t out of love for signatures, suggesting they may decide to make a change in the future.

We’re encouraged by the current industry shift around signature requirements, as anything that improves the checkout experience is important to our sellers,” a Square spokesperson said.

The line may be getting faster, but there could be a line-free world soon enough. Experimentation and innovation in the checkout process isn’t just around the corner — it’s already here thanks to Amazon Go stores and other technology that could shake up the entire experience. But for now, consumers in line can get a little bit of their lives back.

Ethan Wolff-Mann is a writer at Yahoo Finance. Follow him on Twitter @ewolffmann. Confidential tip line: FinanceTips[at]oath[.com].

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