Card-Not-Present Transaction

What is Card-Not-Present Transaction?

A Card-Not-Present (CNP) transaction occurs when neither the cardholder nor the physical card is present at the point of sale. This is the standard for e-commerce, phone orders, and recurring billing.

Because the merchant cannot physically verify the card or the cardholder’s identity, CNP transactions carry a higher risk of fraud. Consequently, they often have higher processing fees and require additional security measures like CVV checks.

Why It Matters

• Powers the entire global e-commerce and subscription economy

• Requires specialized fraud prevention tools to verify customer identity

• Carries different liability rules compared to physical transactions

• Influences the processing rates and fees charged to merchants