Card Not Present (CNP)

Simple definition
Transactions where the card isn't physically shown, like online shopping.
Expanded definition
Transactions in which the payment card is not physically presented to the merchant.


Online, phone, and mail orders allow transactions without physical cards. This card-not-present (CNP) commerce unlocks convenience but also risks. Learning how CNP payments work provides the knowledge to maximize opportunities while minimizing vulnerabilities.

Defining Card Not Present Transactions

Card not present transactions occur when purchases are made remotely without physically presenting a card to the merchant. CNP purchases include:

  • Online orders
  • Over-the-phone payments
  • Mail order catalog buying
  • Auto-pay bill payments

Without card swipes or chip inserts, buyers manually enter details during checkout. There is greater reliance on personally identifying data.

CNP Commerce Considerations

Understanding CNP helps buyers and merchants:

  • Navigate verification steps like 3D Secure passwords, CVV codes, and address checks that replace card scanning.
  • Understand why CNP interchange fees differ from card-present rates.
  • Manage higher fraud liability for merchants on CNP purchases.
  • Develop strategies to avoid CNP fraud using tools like address verification.
  • Meet card network compliance rules tailored for CNP transactions.

The Bottom Line

CNP commerce unshackles purchases from physical locations. While this freedom introduces new risks, proper precautions pair opportunity with protection. With vigilance, CNP capabilities become the ultimate cardholder convenience.