Card not present credit card processing

29 March 2018

Written by Libby James

Libby James is co-founder, director and an expert in all things merchant services. Libby is the go-to specialist for business with more complex requirements or businesses that are struggling to find a provider that will accept them. Libby is regularly cited in trade, national and international media.

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Card Not Present Credit Card Processing: An Essential Guide

Understanding Card Not Present Transactions In the world of merchant accounts and credit card processing, card not present (CNP) transactions play a significant role. Whether you’re an e-commerce business owner, a mail-order company, or a telephone-based service provider, understanding CNP processing is essential for your success. In this comprehensive guide, we will explore what CNP transactions are, how they work, and why they are crucial in today’s digital landscape. So, let’s dive in!

What Are Card Not Present Transactions?

Card not present transactions refer to situations where a customer provides their credit card information without physically presenting the card for payment. These transactions commonly occur in online shopping, over-the-phone orders, and mail-order businesses. Unlike traditional face-to-face transactions, CNP transactions require additional security measures to protect both merchants and customers from potential fraud.

How Does Card Not Present Processing Work?

When a customer makes a CNP purchase, the merchant collects the necessary payment information, including the credit card number, expiration date, CVV code, and billing address. The merchant securely transmits this information to their payment processor or payment gateway. The payment processor verifies the card details and facilitates the transfer of funds from the customer’s account to the merchant’s account. To ensure the safety of CNP transactions, various security measures are employed. These include;

Address Verification Service (AVS)

Card Verification Value (CVV) checks

3D Secure authentication

These protocols help authenticate the customer’s identity and reduce the risk of fraudulent activities.

Benefits Of Card Not Present Credit Card Processing

CNP credit card processing offers several advantages for both merchants and customers. Here are some key benefits:

Increased Sales Opportunities: By accepting CNP payments, merchants can expand their customer base beyond the limitations of physical locations. This opens up opportunities for businesses to reach a global audience and increase sales potential.

Convenience for Customers: Card not present transactions provide customers with the convenience of making purchases from the comfort of their homes or on the go. This flexibility enhances customer satisfaction and encourages repeat business.

Streamlined Operations: CNP processing allows businesses to automate payment processes, reducing the need for manual data entry. This streamlines operations, saves time, and minimises errors associated with traditional paper-based transactions.

Reduced Fraud Risk: While CNP transactions do carry a higher risk of fraud compared to face-to-face transactions, employing robust security measures significantly reduces the risk. Payment gateways and processors implement advanced fraud detection tools to protect both merchants and customers from unauthorised activities.

How MAS Can Help You

At Merchant Advice Service (MAS), we understand the complexities of card not present credit card processing and its significance for your business. Our team of experts can guide you through the process, helping you find the right payment solution tailored to your unique needs. Whether you’re starting an e-commerce venture or expanding your existing business, we provide invaluable advice and support. To learn more about how MAS can assist you with card not present credit card processing, visit our relevant page on our website. For more helpful advice and industry insights, don’t forget to explore our blog page!

Conclusion

Understanding Card Not Present (CNP) transactions is crucial for a variety of businesses, from e-commerce retailers to subscription-based services. These transactions offer increased sales opportunities by allowing businesses to reach a global audience. They also provide convenience for customers, who can make online purchases or manually enter their card details over the phone from the comfort of their homes.

However, CNP transactions come with their own set of challenges, particularly in the area of security. Employing robust measures like Address Verification Service (AVS), Card Verification Value (CVV) checks, and 3D Secure authentication can help mitigate the risk of card not present fraud and fraudulent transactions.

FAQs

What types of businesses typically engage in card not present transactions?

E-commerce retailers, online service providers, subscription-based businesses, and mail-order companies often process card not present transactions.

What security measures are in place to protect CNP transactions?

Common security measures include Address Verification Service (AVS), Card Verification Value (CVV) checks, and 3D Secure authentication.

Are card not present transactions more susceptible to fraud?

While CNP transactions have a higher risk of fraud, implementing robust security measures can significantly mitigate this risk.

Can I accept CNP payments without an online presence?

Yes, even if you don’t have a traditional website, there are alternative methods such as virtual terminals and mobile payment solutions that enable you to process CNP payments.

What are the costs associated with card not present credit card processing?

The costs can vary depending on factors such as transaction volume, business type, and the payment processing solution you choose. It’s best to consult with a merchant service provider to get a detailed breakdown of costs.

Can I use my existing merchant account for card not present transactions?

In most cases, you can use your existing merchant account for CNP transactions. However, it’s advisable to check with your payment processor to ensure compatibility.

How long does it take to set up card not present credit card processing?

The setup time can vary based on your specific requirements and the payment service provider you choose. Some providers offer quick setup options to expedite the process.

Can I accept international card not present transactions?

Yes, with the appropriate payment processing solution, you can accept international CNP transactions. However, it’s important to consider currency conversion and potential fraud risks associated with international transactions.