Card-not-present transaction
What is a card-not-present transaction?
A card-not-present (CNP) transaction is a card payment completed without the physical card being read by a terminal. The cardholder supplies the card number, expiration date, and CVV electronically, so there's no swipe, chip insert, or tap. CNP covers online checkouts and purchases.
What defines the category is how the data is captured, not whether the customer is nearby. A payment is card-present only when electronic card data is captured at the point of sale. If a staff member keys the details in manually while the customer stands at the counter, it still counts as card-not-present.
Key facts
- Card data is entered electronically – there is no swipe, chip, or tap.
- CNP is the default for and MOTO payments.
- Classification depends on data capture at the point of sale, not the customer's physical presence.
- Fraud liability usually sits with the merchant, because the card can't be authenticated at a terminal.
- Processing fees run higher than card-present because of the added risk.
How a card-not-present transaction works
- The cardholder enters the card number, expiry, and CVV into an online checkout, an app, or over the phone.
- The details pass to the , which routes them to the card network and the issuing bank.
- Risk checks run before approval, including , , and , to confirm the payer holds the card.
- The issuer approves or declines the request, and the response returns to the merchant.
- On approval, the transaction is captured and later settled to the merchant.
Card-not-present vs card-present transactions
| Attribute | Card-not-present | |
| Card data capture | Entered electronically (number, expiry, CVV) | Read by a terminal via swipe, chip, or tap |
| Typical environment | Online, in-app, phone orders | In-store, at the point of sale |
| Authentication | AVS, 3D Secure, fraud scoring | Chip and PIN, terminal-level checks |
| Fraud risk | Higher | Lower |
| Fraud liability | Usually the merchant | Usually the issuer |
| Processing cost | Higher | Lower |
Why fees and fraud run higher for CNP
Because no terminal authenticates the card, a valid card number, expiry, and CVV are often enough to push a payment through. When the real cardholder later disputes the charge, the and the lost goods land on the merchant rather than the .
That liability is what drives merchants to layer AVS, 3D Secure, and scoring onto remote checkouts, and it's why acquirers price CNP processing above card-present rates. The exact markup depends on the industry and the fees set by the payment processor.
