Whenever a merchant accepts a payment where there is no physical credit card or checks involved, it is referred to as a CNP transaction. This means card not present, and it is a more common payment method than people may realize. Of all the payment methods that are on the rise, card not present is probably one of the most frequently used, but is also a term least frequently acknowledged in lieu of phrasing like “digital payments”. For the digital payment novice, here’s a brief breakdown of the basics of card not present payments:

Basic Online Payment Processor Breakdown

Contrary to popular belief, card not present payments do not cover all types of cardless transactions. It can be easily confused with MOTO payments, or mail order/telephone order payments, but there is a difference. MOTO generally refers to phone and mail specifically, but card not present transactions also cover online payment gateways for eCommerce and mobile app payments. MOTO is sometimes used as a cross-reference term because similar to card not present, these transactions do not have a merchant or physical payment method present at the time of exchange. Dissimilar to card not present, however, MOTO merchants will likely have to pay higher transaction fees due to the higher security risk of sending payments via phone or mail.

What About Card Not Present Fraud?

Although there are security risks involved, like with any payment method, card not present transactions still offer benefits, (convenience being at the top of the list). An online payment processor comes in handy for providing security help, but merchants themselves should still be aware of what they need to do in terms of fraud protection to keep customer information and their business safe from harm.

PaymentWeek recently mentioned that as security grows for EMV credit cards and other in-person forms of payment, the fraud risk for CNP will rise. Take heart, though. With the advent of so many card not present payment methods, providers will also continue to work on matching the security needs for them. The key is strength in numbers. The implementation of layered security measures such as multi-factor customer credentials authentication and device verification, fraud is that much more preventable.

An online payment processor can provide fraud protection and security software like Verifi and Ethoca, but there are more security measures to consider, both from a merchant and an online payment processor standpoint. Payline offers Verifi for address verification service within our payment processing services, as well as Ethoca for sending alerts when there is potential fraud activity.

These software and other services will be helpful in protecting the security of your business and customers, but the greatest weapon against cyber attacks is awareness. Be sure to partner with an online payment processor that is up on security and how to best handle transactions. Keep an eye on all said transactions for any suspicious activity and stay on top of tech and payments industry news. In addition to the Payline blog, there are several outlets available to you as a merchant to stay ahead of hackers and avoid potential chargebacks.

As more retailers, restaurants and other merchants stay in touch with customer payment preferences, card not present payment methods will continue to stick around and evolve. There will always be risks when dealing with payments within the confines of a mobile app or an eCommerce store, but this is where an online payment processor can help. With ways to combat those risks, card not present payments will continue to make their mark on the rise of digital payments.

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This piece was written by Lauren Minning, Content Specialist for Payline.