Card-Not-Present
A card not present (CNP) transaction is one where the cardholder and the card are not present at the point-of-sale (compared to a card present transaction, where both the cardholder and card are present). A CNP transaction can be for:
There has been a phenomenal growth in CNP transactions in the UK as consumers have moved an increasing proportion of their shopping to this remote sales channel.
When accepting a CNP transaction (and assuming a merchant is not using MasterCard SecureCode or Verified by Visa to authenticate an internet transaction), a merchant is responsible for ensuring that it is not fraudulent and, where it is, they are liable for the loss incurred. A merchant will need to consider the risks that if a payment is disputed or charged back they may find it difficult to prove the real cardholder was involved in the transaction.
Please note: even though a merchant may have received an authorisation for a CNP transaction, it does not guarantee payment or confirm that the genuine cardholder provided the card details to them.
To assist merchants who are accepting CNP transactions there are number of tools available that can help in preventing fraud:
- For sales made over the internet there is MasterCard SecureCode and Verified by Visa.
- For general CNP sales, there is AVS / CSC.
- There is also a range of third-party fraud prevention solution providers that may be of interest depending on the type of business a merchant is operating.
There are specific card scheme rules on how a CNP transaction has to be processed and which card types can be used for a particular type of transaction or where certain measures are required to be taken. An acquiring bank can advise their merchant on the steps to be taken when accepting a CNP transaction, how to process mail order and telephone order transactions using a terminal, and also provide help and guidance on the fraud tools a merchant could use to help reduce any potential fraud and chargebacks.
A merchant may also need a separate agreement with their acquiring bank to accept CNP transactions where they already have an agreement in place for card present transactions.
See below for more details on the three CNP transaction types which can be accepted via these remote sales channel. An acquiring bank can provide details on how each of these transaction types should be processed and the card schemes’ rules that need to be followed.
Please note: mail order or telephone order transactions are also often referred to as MOTO transactions.
