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