On April 5, 2018, Mastercard (MA) made an announcement that from April 13 onward, all merchants in Canada and the United States would be able to eliminate the process of requiring signatures from cardholders.
The idea focuses on removing the hurdles faced during the checkout process and allowing participating merchants to improve the experience. However, it will be on merchants to decide when they want to bring this change forward.
This change will also be in the best interests of users. According to Mastercard’s management, merchants don’t believe there’s much use in requesting users’ signatures, so implementing the change will bring efficiency.
A survey conducted by Mastercard
According to a survey by Mastercard, its users are in support of eliminating the signature requirement during transactions. The company also understands what prompted it to adopt this move in the first place. Over the last several years, it has successfully added new solutions that focus on security, making cardholders’ signatures less useful. This move is in line with Mastercard’s plan to improve the customer experience.
While Mastercard’s EBITDA (earnings before interest, tax, depreciation, and amortization) margin is 59.5% on a trailing-12-month basis, its peers (XLF) Total System Services (TSS), Ally Financial (ALLY), and Synchrony Financial (SYF) have EBITDA margins of 23.5%, 73.4%, and 27.1%, respectively, on a trailing-12-month basis.