Card Not Present
When payment methods are completed using a card or cardholders who are not physically present, it is known as “card not present.” When shopping in a real shop, both the card and the cardholder must be current at the retail shop. But, when buying online, none of these must be present. Secure ways of payment are adopted to ensure that the person completing the purchase is authorized to do so. When paying for products online without the presence of a card or a sign from the holder. One such method is to ask for the card’s mailing address. If the incorrect data then, the transaction is refused.
Whenever you process a card not present payment, you must incur the same fees as when you handle a credit card transaction with the card present. Transfer costs for card-not-present transactions are higher because the risk of fraud is increased when the card- not -present. The charges are carried on to the merchant, hence why card not absent purchases have high rates.
Card Not Present transactions and working
A CNP transaction takes place when credit or debit card information is exchanged over the internet, by phone, or by mail. Since CNP scenarios tend to be where the majority of potential fraud happens. The card organizations coined this phrase to help identify such activities. Cards organizations urge vendors and institutions to watch against fraud in CNP transactions through the Location Verification System.
Card-Not-Present Transactions Have Risks
While badge transactions have benefits, they also have drawbacks. The most risk is losing money rather than making it. You’ll need to understand the dangers associated with CNP payments to protect your business from potential losses.
Increase the Chance of Fraud
Card-present purchases come with built safeguards that assist protect your company from fraud. Shoppers have to be aware at the moment of sale, any uneasiness or suspect behavior can be easily identified. If the situation appears strange, it is also possible to check the account number identification. EMV chip-reading point-of-sale machines can detect fake cards and prevent unauthorized transactions. Merchandise is delivered at the date of acquisition, ruling out the possibility of it being misplaced in the mail or taken from the front porch. However, card-not-present transactions are not protected by the same safeguards. You may be more prone to exploitation if you don’t have such safeguards.
Best solutions for card-not-present
You can reduce the chances of fraud overpowering your CNP transactions and avoid the expensive fees that come with following these four best practices. Consider these credit card standards that merchants must comply with during every CNP transaction.
1. Never save a customer’s credit card details on an unsecured platform.
You should enter a customer’s credit card details directly into the virtual terminal online when you ask for it. Don’t save any one of these details on an unprotected hard disk or a bit of paper. In any size business, this reveals your client card details to everyone who understands where to look. Similarly, do not request credit card details by mail, text, or live chat. The risk of this information falling into the hands increases when it is sent to unprotected channels.
2. Please include your contact details.
Every page of the website, the invoices you issue, and any communication you have should include an email address customer may contact for questions. If this data is kept hidden, card conflicts will emerge (aka chargebacks).
- Make sure your contact info is visible on every page of your website.
- Make sure to include your email address in any correspondence.
- Double-check that your payment descriptor is current.
3. Always double-check a customer’s address with AVS.
The Address Verification System is used by merchants to verify the customer’s billing address. The account number on file with the credit card company should match the location used for the transaction. The credit card company flags the transaction if there is a discrepancy between both two sets of information. This best practice for card-not-present transactions is critical for internet and retail firms.
Inquiring about a customer’s card number isn’t simply about security; it’s also valuable if the purchase is flagged for fraud or refund. You want as much info as necessary about the transaction because it will make life simpler for you.
4. Make sure you’are following PCI compliance rules.
PCI compliance guidelines provide the standards that all businesses must adhere to safeguard their customers’ private information. It allows customers to have faith in the business. They will also have peace of mind knowing that their financial data is safe and secure.
Fortunately, if a company engages with an online payment company to handle your transactions, your software is probably already PCI compliant. Most businesses in this area consider PCI rules being the industry standard, and will only utilize compliant technology. They do provide materials to ensure that your company follows these standards on the merchant side.
Implementation Practices in Your Business
The e-commerce environment is depleted knowing this data is the first step; putting it into action is the test. Whenever it comes to reducing fraud in the card-not-present purchases, using the best practices that are provided to you. Implementing the required precautions to protect your company from chargeback issues will ensure that your company stays healthy.
If you’re an established online firm or a new internet store looking to sell software, digital copies, or online downloads, getting familiar with the online ecosystem is essential. Understanding the basics underlying card-not-present transactions is just the beginning.