We are living in a digital era where it is not necessary for a customer to have a form of payment in hand to make purchases. What to know how? Well, it’s via card-not-present (CNP) transaction. When you make a purchase using a payment card, cardholders encounter any of two types of transactions: card-not-present or card present. When a customer makes a purchase from a location different than that of the merchant, they are doing a card-not-present transaction. On the other hand, when the merchant can see in person the card, for making the purchase, the customer is conducting a card-present transaction.
What Is Card-Not-Present Transactions?
Simply put, when the seller and buyer are not in the same place while making the transaction, it is considered a card-not-present transaction. Electronic, Mobile, telephone, and mail orders are some of the most popular examples of a card-not-present (CNP) transaction.
There are several CNP transactions that you come across every day. Check out some of the examples of card not present transactions:
- Online purchases – These are those transactions where a person purchase goods through an ecommerce transaction or make any other kind of online purchases.
- Phone orders – When a customer makes use of the phone to provide the credit card information to your business.
- Recurring payments – These are for those transactions in which payments are set up to bill automatically.
- Invoices that are paid online.
- Mail order payments via virtual terminals
- Shopping on the web and “buy” buttons on websites
- Manual card entry in a payment app
- Recurring or subscription billing
- Electronic invoicing
- Mobile wallet payment within an app or through the internet
As far as card not present transaction process is concerned, for making a purchase using the internet, customers need to enter their shipping, billing, and payment information into a form, which will then send the data to the merchant’s payment gateway for the processing. When it comes to telephone orders or mail orders, the customer needs to provide the merchant with the credit card information either vocally or by sending a mail and allowing them to enter the data into the gateway themselves. The very information is needed every case, and the purchase is usually processed in the same way, just through a little different means.
Generally, the payment card information that is used in card not present transaction process includes:
- The card’s expiration date.
- Card number written across the front side.
- The card security code.
- Personal information of billing.
No doubt that the ability to accept payment cards remotely provides the merchant with an opportunity to get to a lot more consumers. But, at the same time, this ability also makes them a lot more vulnerable to fraud. There are two major types of fraud that merchants processing card-not-present transactions deal with.
Chargeback fraud occurs when a customer orders and receives a product from a merchant but tells their bank they did not authorize the charge or haven’t received the product. Chargeback and the amount paid is taken back from the merchant’s account.
Some people make illegal use of your information. chargeback scam results in the merchant losing both the product provided to the customer and also the income attached to the product. Adding insult to the injury, they have also assessed a fee for every disputed transaction.
Credit Card Fraud
Criminals can use stolen card numbers or credit cards to make purchases that the cardholder did not consent to. This result in theft from the cardholder as well as it also gives an opportunity to chargebacks to be filed against the merchant.
You don’t have to worry, as there are a few options like DizziPay, which can help you to prevent these internet frauds. Contact DizziPay and learn how it can help you!