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Card Not Present

 

Card Not Present (CNP) transaction occurs when a payment is made without the physical presence of the payment card. Common in online and over-the-phone purchases, CNP transactions lack the traditional card swipe or chip insertion. Instead, cardholder details, including card number, expiration date, and CVV, are provided electronically. Even if a customer is physically present and provides their card to manually input the required information, the payment would still be categorized as card-not-present. Beyond just the physical presence of the credit card, a transaction is categorized as a Card-Present Transaction only when electronic data is captured at the point of sale. 

While CNP transactions offer convenience, they pose higher fraud risks compared to card-present transactions. Merchants implementing CNP transactions should employ robust security measures, such as Address Verification Service (AVS) and 3D Secure, to mitigate potential fraud.

Every successful credit card transaction comes with fees for businesses, and CNP processing fees tend to be higher than those for physical card transactions due to the added risk. The precise fees depend on the industry and the markup set by the payment processor.

Recognizing the distinct characteristics of CNP transactions is vital for merchants to implement effective fraud prevention strategies, safeguard customer information, and ensure secure electronic transactions in the digital landscape.

 

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