Card Not Present (CNP)

Definition: The distinction between Card Not Present (CNP) and Card Present (CP) transactions is pivotal in the payments industry, defining how a transaction is processed based on the physical presence of the credit or debit card at the time of the transaction.

Card Not Present (CNP) Transactions: CNP transactions occur when the cardholder does not physically present the card to the merchant during a transaction. This is common in online purchases, telephone orders, and mail orders. In these cases, the cardholder provides card details such as the card number, expiration date, and CVV to complete the transaction. Given the absence of the card, CNP transactions carry a higher risk of fraud, prompting the need for additional security measures like address verification service (AVS) and card verification value (CVV) checks.

What is a Card Not Present Transaction?: A CNP transaction is defined by the method in which payment details are provided without the card being physically inspected by the merchant. The rise of e-commerce and digital payments has led to an increase in CNP transactions, highlighting the importance of secure payment gateways and fraud prevention technologies.

Card Present (CP) Transactions: Conversely, CP transactions involve the physical use of a credit or debit card at the point of sale (POS). The card is either swiped, inserted (for EMV chips), or tapped (for NFC/contactless payments), allowing the merchant’s terminal to read and process the payment information securely. CP transactions are generally considered more secure than CNP transactions due to the direct verification of the card and cardholder.

Implications for Merchants and Cardholders: Understanding the differences between CNP and CP transactions is crucial for both merchants and cardholders. Merchants need to implement appropriate security measures for both types of transactions to protect against fraud and ensure compliance with payment processing standards. For cardholders, awareness of the transaction types can enhance vigilance in protecting sensitive payment information, especially in CNP scenarios.