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.

Taking effect in July the new policy makes about ninety eight percent of more than eight hundred United States merchant categories in Visa’s system will be able to accept 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 says that the new policy means faster and more convenient and faster payments for people carrying credit cards. According to a survey, sixty nine percent of respondents say either convenience or speed is the main reason why they use a card. Also, the new policy may help issuers get into the cash dependent markets. In actuality, 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 that are transmitted by a special equipped chip card and eliminate the need for a card swipe while simultaneously speeding up the time it takes to make a sale.

Visa doesn’t see a conflict of interests, saying that it’s no signature rule and it’s contactless technology go hand in hand. It states that these are complementary, with no signatures paving the way for contactless sales. For them, going signature free is just an initial step towards the newer technology.

Mallory Megan works for a debt collection agency. Also she does stories on business, finance, credit industry and http://www.linkedin.com/companies/rapid-recovery-solution-inc.?trk=ppro_cprof&lnk=vw_cprofile