When Apple Pay Requires a Signature and When it Doesn't

Apple Pay shouldn't normally require an additional electronic signature. However, some users have reported that they've also been asked to provide a signature from time to time. This is a first, informal report on when you may or may not have to electronically sign with Apple Pay.


Have I mentioned before that I love Apple Pay? I've written a lot about it. Along the way, I ran across a story about Apple's Senior Vice President Eddy Cue showcasing Apple Pay with a shopping trip. "Apple exec Eddy Cue goes on 'holiday shopping spree' to showcase Apple Pay." In that article, the author wrote:

When later asked why the [Eddy cue] purchase required a signature, Cue said purchases over a certain amount necessitate the extra step to prevent fraud. The same mechanism is true of many credit cards on which Apple Pay is based.

I wondered about that, so I asked my own credit card issuers about their policies. What I found is that, in my two cases, 1) there is no fixed dollar amount that dictates when I have to sign and 2) there is a very sophisticated, tiered fraud prevention system, from the credit card corporate level, then down to the issuing bank, and finally the merchant that may dictate when I have to also sign.

(Note, those point of sale terminals capture an electronic signature. A digital signature is something different.)

1. American Express. I spoke with an AMEX representative who told me that, yes, the whole idea of Apple Pay is that you shouldn't have to sign. And there is no fixed dollar amount that triggers a signature requirement. Instead, the normal fraud prevention rules apply, and they could kick in depending on the circumstances. Plus the merchant may have its own policies.

2. Visa. I learned from chatting with my Visa card issuer that there is a transaction mode reported electronically. Depending on both Visa Corporate policy and the issuing bank's policy, the Apple Pay transaction can, apparently, be treated in a certain way. For example, one purchase I made at Macy's was logged as "Proximity payment (probably meaning NFC); magnetic stripe rules."

That means, even though the transaction was known to be via NFC, it was determined by someone in the chain that mag stripe rules would apply: that is, electronic signature required (subject to any local policy on low cost items). That could have been tied to the dollar amount, but I was told that there is generally no fixed dollar amount in the formula. It's more related to their procedures for fraud prevention, methods I wasn't told about, and merchant policies.

The Merchant Option

Both issuers reminded me that the merchant always has the option, at the point of sale device, to elect to protect themselves in a high dollar purchase by asking for a signature. I think this happend to me at a Macy's when the sales clerk was perhaps unaccustomed to Apple Pay and likely triggered a request at the cash register for a signature for a (very modest) jewelry purchase.

Some people use a more casual signature on these terminals, different than the one they'd put on a check or legal document, because they don't want their full signature captured and stored electronically. Exactly how that's handled in a dispute is interesting, but it's a completely different article. 

Finally, while my two issuers stated that they didn't have rules for a fixed dollar amount, some other card issuers (Eddy Cue's for example) or local merchants, like Whole Foods, may have their own rules in place that do get tied to fixed dollar amounts. For a long time now, when I buy items at my local grocery store with a conventional Visa card and magnetic stripe, purchases below $25 don't require a signature. They're trading customer convenience against the chance that the customer may claim they never made that purchase.

What I learned is that there are a lot of players, all with various customer service policies and fraud prevention protocols. In time, I surmise, each player in any given chain of a transaction has the liberty to change its handling of Apple Pay transactions as confidence is gained. Or maybe not.

I plan to continue this research and will report if I find anything new.