Card-not-present (CNP)

What are the card-not-present operations?

Card-not-present operations are banking facilities using the card without the physical presence. These financial operations belong to the class of high-risk operations. Why so? Because the presence of the card owner and his signature are not required for making a payment. The expiration date of the card, number, and in some cases the authentication code is enough to carry out the operation. All virtual card payments are considered as CNP transactions.

To make certain transactions via the Internet, there is no need to use the payment terminal, enter a pin code, perform any other actions related to the physical presence of the buyer at the sales point. So, it is enough to indicate the card details in a payment form and confirm the operation via SMS code. The customer completes the CNP operation after debiting funds from balance.

For instance, the most typical examples of such transactions are:

• financing operations on the e-commerce market,
• deals performed by a merchant on the basis of an order from the holder received by mail or by telephone,
• and operations carried out on a periodic basis (payment for subscriptions to periodicals, payment of membership dues, etc.).

So, CNP operations are:

•        Any online transactions;
•        Mail order or telephone order operations;
•        Recurring payments.

It is possible to identify all virtual card payments as CNP transactions.