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How To Accept ‘Card Not Present’ Transactions

March 21, 2016


What is a ‘Card Not Present’ transaction?

A Card Not Present transaction, otherwise known as a remote purchase CNP, is where neither the card or the cardholder are present at the time of the sale (point of sale). This means the cardholder cannot physically present their card to the merchant at the time of payment. 

What can ‘Card Not Present’ transactions be used for?”

CNP transactions can be used for an order:

1. by mail

2. by telephone

3. by the internet

How to accept ‘Card Not Present’ payments

1. By mail

Merchants can accept CNP transactions by mail when customers send in orders by post or by fax (i.e. mail). Customers fill in an order form, including all their card payment details (everything bar their PIN number), as well as their signature, in order to authorise the payment.

If a merchant would like to clarify which card details they need in order to complete the mail order purchase, they should speak to their acquirer (the processer of the merchant’s card payment transactions).

2. By telephone

CNP telephone orders are very similar to mail orders, with the main difference being that cardholders present their card details to merchants over the phone and so cannot then provide a signature.

Instead of a signature, merchants can ask additional security questions, for instance asking the cardholder for the three digit Card Security Code (CSC), which can be found on the back of the debit or credit card. This helps to protect both the cardholder and the merchant from fraudulent transactions. 

3. By the internet

When a merchant wants to accept payments over the internet, they must set up a special agreement with their acquirer, who will provide the merchant with an internet merchant number. This is a separate number to the one the merchant would usually use when processing card present, mail and telephone orders.

For a successful internet transaction to occur, a website (online shop window) is needed. Merchants will need to secure a payment service provider (PSP), who will handle the merchant’s online transactions.

A PSP ensures a secure online payment gateway, where cardholders can enter their data safely and securely. This data is then passed from the PSP on to the merchant’s acquirer, who processes the transactions. It is always worthwhile checking with the acquirer to see whether they have any preferred PSPs, since it is possible that they may have their own payment gateway product.

The acquirer will be able to provide the merchant with a lot of guidance and valuable information about trading on the internet, for instance making sure the merchant’s website conforms to card regulations, how to use card payment tools, fraud screening tools, and how to ensure everything is integrated smoothly so that the merchant’s business operates as successfully as possible.

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