Card Not Present (CNP)
The term "Card Not Present" (CNP) refers to a type of payment card transaction where the physical payment card is not presented during the purchase. In CNP transactions, the cardholder provides their card details to the merchant through alternative means, such as online or over the phone, rather than physically swiping or inserting the card into a card reader.
Key aspects of Card Not Present (CNP) transactions in the payment card industry include:
1. Online Purchases: CNP transactions are commonly associated with e-commerce and online shopping, where customers enter their card information on a website or mobile app to make a purchase.
2. Mail Order/Telephone Order (MOTO): CNP transactions can also occur when customers provide their card information over the phone or through mail order forms.
3. Higher Fraud Risk: CNP transactions are generally considered to have a higher risk of fraud compared to Card Present (CP) transactions because the physical card is not available for verification. This makes it important for merchants to implement robust security measures to protect against fraudulent activities.
4. Security Measures: To mitigate the risk of fraud in CNP transactions, merchants and payment processors often implement additional security measures such as address verification systems (AVS), card security codes (e.g., CVV or CVC), 3D Secure (e.g., Verified by Visa or Mastercard SecureCode), and fraud detection tools to validate the authenticity of the transaction.
5. PCI DSS Compliance: Merchants that process CNP transactions are subject to the Payment Card Industry Data Security Standard (PCI DSS) requirements. They must adhere to specific security controls and practices to protect cardholder data and minimize the risk of data breaches.
6. Consumer Convenience: CNP transactions provide convenience to consumers by allowing them to make purchases from anywhere without physically presenting their payment card.
It's worth noting that the rise of CNP transactions has led to increased focus on security and fraud prevention in the payment card industry. Payment card networks, merchants, and financial institutions continuously work together to develop and improve security measures to protect against unauthorized use and fraudulent activities in CNP transactions.