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A Merchant's Guide To Card-Not-Present (CNP)

It is estimated that more than half of today's transactions are categorized as card-not-present. This means that neither the buyer nor the card is present at the moment when the transaction is made. Most online purchases and recurring subscriptions to services are card-not-present (CNP) transactions and their number is expected to grow in the upcoming years.


If you have a small business or shop, it's paramount to understand how card-not-present transactions work. These transactions are also commonplace for online shops where people can buy products and services from a distance.


What Is A CNP Transaction


In the simplest terms, CNP transactions occur when a product is bought without the presence of the buyer or his/her credit card. If you just bought a pizza online to have it delivered to your house, that's a CNP transaction. You were not present at the restaurant and neither was your credit card. The transaction took place online and you just entered your details to be processed by the bank connected to the pizza restaurant.


Types of CNP Transactions


As mentioned earlier, CNP transactions occur usually from a distance. For example, buying from an online store is a CNP transaction. Paying invoices online also falls into this category. Although you're paying with a credit or debit card, this plastic item is not physically present at the store from where you buy. Phone orders and automatic billing are also CNP transactions as well as mail orders and various types of website payments.


Understanding CNP Frauds


Unfortunately, CNP frauds can also take place. Since the physical presence of the buyer is not needed, it's tempting for unscrupulous people to buy something with credit card details that do not belong to them. However, payment processors have thought of this and they implemented a plethora of security checks. For example, buyers need to enter the CVV code at the back of their credit card before completing a purchase. Other online stores or companies use an AVS (address verification service) to check if a person is legitimate or not.


The Future of Processing CNP Transactions


As mentioned earlier, CVV codes and AVS tools are a great way to verify the identity of a buyer. However, the future can get even more secure than this. Millions of people already buy products and services using their mobile devices. That's why the future of CNP transactions consists of touch ID or face ID verification.


Simply put, you will have to press the home button of your mobile to verify your identity or authorize a payment. These methods are already implemented for various banking applications. You can also use a face ID with the same purpose and not have to remember your CVV code when you buy something.


CNP transactions are becoming more and more popular these days. If you run a small business or company, it's important to know more about card-not-present transactions and how they can bring you more money in the long run. Feel free to contact Millenium Payments today to explore your options when it comes to credit card payments for small to medium-sized businesses.

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