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Wednesday, June 19, 2024

What does Card Not present on pending transactions mean

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When neither the cardholder nor even the credit card is physically present at the time of the payment, it is known as a card-not-present (CNP) money transfer. It is most frequent for purchases made over the phone, by facsimile, through the internet, or by mail. At the time of the payment information of sales is an exchange considered card existing. When a card is swiped through a scanner or an EMV chip is decoded. They are the example of the not present card:

  • Online buys, which happen when a client purchases the product via the internet or e-commerce activity.
  • Telephone orders, where a user provides your credit or debit card information over the phone.

Card-Not-Present Transactions 

Card-not-present transactions refer to any sales that can take when the buyer and vendor are not in the same area. CNP transactions perform when the retailer cannot see the credit or debit card used to buy the thing, as the title suggests. This includes transactions made over the telephone or through the mail. Purchases made over the internet, or e-Commerce, are the most popular sort of card-not-present purchase these days. Although most e-Commerce transactions occur on a PC, consumers are increasingly shopping on their tablets and phones.

The same credit card information needed for any CNP purchases. Customers make an online buy by completing an online form, which is then sent to the merchant payment processor to execute. Customers must supply credit card information over the phone or by mail for non-internet orders. This means retailers must type the info into the gateway directly. 

After reviewing the details in the application, the payment processor, financial institution, and card networks either authorize or deny a transaction. 

The payment card information utilized in this operation often includes the following:

  • The card number was written across the front.
  • Information about your billing.
  • The date upon which the card will expire.

Risks of CNP and Fraud

Card not present (CNP) transactions make up roughly 45 percent of all credit card fraud cases in the USA. The higher risk is due to several factors. Not the least of all this is that cardholder data is harder to verify if the card is not present. Buyers can also allege that they did not permit charges or receive the merchandise in issue. Both of these situations could result in refunds for your business.

It puts everybody at risk and could lead to certain firms getting labeled as high-risk merchants in the future if you don’t take chargeback preventative measures. As previously stated, the degree of danger for badge merchants is substantially higher than for card-present merchants. There’s a good reason for this, CNP transactions don’t need as much concrete proof, which increases vulnerability to fraud. When a transaction utilizes card-present equipment, the merchant can directly verify the purchase. A credit card can be checked to the bank card. 

Any one of these ways, and others, offer quick proof to a merchant that the cardholder is who purports. Merchants who take card-not-present payments, may not have the same chance to verify the buyer.

Correctly processing Card Not Present (CNP) transactions

Handling and completing your Card Not present plays an essential role in the most crucial things that protect yourself and your business. It entails acquiring enough customer information, such as a mobile number, email address, billing information, and shipping information. You must also verify that you have all the required credit card details to complete a transaction, which includes:

  • Cardholder’s name Expiration date
  • Credit or debit card number 
  • CVV security code

As all of these factors are important, the safety code also provides an additional layer of protection to your company when handling CNP transactions.

Payments made by the merchant 

There’s a difference between completed transactions by the merchant and remote payments completed by the consumer, which we must be clear about. The following items are included in the merchant’s cardholder, not present transaction:

  • Card on file transactions, in which the merchant handles card information 
  • MOTO (Mail Order and Telephone Order) payouts in a digital terminal

The Merchant Solution is in charge of overseeing the patient’s sensitive card information. Frequently requires PCI-DSS compliance, which entails annual paperwork and costs. The merchant would’ve been relieved of the hassle of PCI-DSS compliance if customers could pay online. The below are ways for consumers to conduct their card-not-present transfers:

  • Payment options
  • Invoices sent via email 
  • Internet payments via a website or app

Preventing the card not present

Compliance with the Payment Card Industry

The Payment Card Industry Data Security Standard (PCI DSS) was established by the card strategies to govern the space, transmitting, and handling of cardholder data. All merchants who accept payments should verify that they are PCI compliant and all possible to avoid data breaches. Merchants will be allocated one of four layers of PCI applying standard on card transaction volume, with Tier 1 having the tightest restrictions. The bulk of Payment Service Providers (PSPs) are PCI DSS Level 1 certified, which will ease your regulatory load. Our guide will teach you all you need to learn about PCI compliance.

Chargebacks are avoided at all costs.

Customers can contact their financial institution and seek a chargeback if they disagree with a list of the top to their account. If you opt to engage in the represent procedure. And cannot adequately establish that the consumer received your goods or services. You will probably have to repay them and pay chargeback fees which are set by the card scheme or your acquirer. 

Chargebacks can occur for a variety of reasons, such as taking action that the customer mistook for cancellation, a lack of clarity on their attached invoice, or genuine cases of fraud. Chargebacks are a pain for vendors, and vigorously preventing them can save time and money over the long term. When billing clients, it’s a good idea to use a recognizable company, clearly display data about return and cancellation policies, and implement security protocols like the ones mentioned below.

System for Verifying Addresses

It is worthwhile to invest in an Address Verification System (AVS) to help reduce fraudulent activity. If a card is taken, the scammer will have quick access to the information on the cards but no further data about the cardholder. That’s where the AVS comes into the picture, giving an extra layer of security.

When a fraudster attempts to submit card details on an e-commerce site, they would be unable to advance unless they have correct billing address details. Various AVS response codes will be activated, requiring the merchant to take any action. It may appear that validating a customer’s address adds extra stages to the consumer journey, but it’s worthwhile to provide you and your consumer’s peace of mind. Using an AVS can also be helpful when fighting chargebacks.


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