A person avoiding CNP transactions by presenting a card

Cash, checks, credit, and debit cards – there’s no shortage of ways for people to buy products and services. When you think of traditional payment methods, someone presenting a card, cash, or check probably comes to mind.

However, with ecommerce and online purchases being the norm, a person or business doesn’t always need their card handy. Let the payment processing experts at Group ISO teach you more about CNP transactions, their advantages, and risks.

What Are Card-Not Present Payments?

Card-not-present (CNP) payments are when customers buy products or services without having a physical debit or credit card present. At first, hearing about transactions without a buyer’s card present might seem like a major red flag. But these payments aren’t always more risky that a face-to-face transaction.

Examples of CNP Transactions

CNP payments are more common than you think. Here are some examples of common types of CNP purchases, including ones you or customers likely often use.

Online Transactions

In 2022, annual global online retail transactions exceeded $5.7 trillion. In the past few decades, the world of online transactions has become massive. In most cases, online transactions are secure and legitimate without cardholders having to physically present their debit or credit cards.

Card-on-File Payments

Understandably, companies want to make the buying experience convenient for customers. Offering a fast and convenient checkout process helps do away with the chance of a shopper abandoning their online carts. One way companies do this is by allowing shoppers to securely save their payment information for future purchases.

Recurring Payments

Whether someone pays for streaming services or subscription boxes for their pets, many companies sell products and services through recurring payments. These CNP transactions supply businesses with continual, predictable revenue. Recurring payments also continue providing customers with what they want.

Mail-Order Purchases

Now that we live in a digital age, you either fondly remember mail-order purchases or have no idea what they are. Younger generations may have missed out on mail-order purchases because they were popular when people and companies purchased products in catalogs.

Mail-order purchases typically require someone to fill out payment-related information on a physical form and mail it to a business. This business processes a customer’s order after receiving this person’s billing information.

Why Accept CNP Transactions?

You now know what types of transactions don’t require a card. Check out these main benefits of accepting payments without a card present.

Making More Revenue

Every business needs a revenue source. For most, this revenue comes from transactions. However, you’ll limit your company’s potential to make revenue if customers can only pay with a physical card.

Convenient for Customers

As mentioned earlier, customers enjoy a fast and easy checkout experience. Checkout experiences offering saved payment information let shoppers complete purchases quickly without presenting their cards.

Expanding Your Company’s Reach

If your business is like most, its online presence is a main contributor to its revenue. This holds especially true for ecommerce companies that require a website to make profits. Local companies can make more than enough revenue through in-person sales.

But requiring shoppers to present physical cards eliminates the possibility of online revenue, which may be more valuable than profits from in-person customers.

Card-Not-Present Fraud

A person with multiple credit cards in their pocket

Almost every payment type has associated risks. Unfortunately, the same applies to card-not-present payments. The main risk of CNP payments is fraud. Data from 2019 reported that 73% of credit card fraud came from CNP transactions. When someone doesn’t present a physical card for payment, there’s a possibility that one person stole another’s financial information.

Several ways to potentially prevent CNP fraud can include:

  • Obtain CVV/CVV2/CSC: When accepting payments without a card present, obtaining its three-digit number helps prevent CNP fraud. While not always, sometimes people making fraudulent purchases won’t have this vital code.
  • AVS, or Address Verification Service: is a security feature used in credit card transactions to help verify that the address provided by the cardholder during the transaction matches the address on file with the credit card issuer.
  • Be a PCI-Compliant Business: The Payment Card Industry requires many companies to be PCI-compliant. This means compliant companies utilize security protocols that help prevent card-related fraud.
  • Customer Education: Some companies offer helpful information for customers, helping these people reduce any likelihood of fraudulent transactions.

Group ISO Takes the Confusion Out of CNP Transactions

Group ISO is a merchant services and payment processing company. With over 20 years of experience in these industries, we help companies everywhere accept card-not-present payments, complete transactions, and continue earning revenue.

Our company offers extremely competitive prices, competitive rates, 24-hour support in over 30 languages, and a wide range of payment software and products. We also complete all work in-house, from customer service to underwriting and risk, we do it all so you don’t have to. Contact Group ISO today for a free analysis of your business.

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