What is a card-not-present transaction?

A card-not-present (CNP) transaction occurs when neither the cardholder nor the credit card is physically present at the time of the transaction. It’s most common for orders that happen remotely — over the phone or by fax, internet, or mail.

A transaction is only considered to be “card present” if payment details are captured in person, at the time of the sale. This occurs when cards are physically swiped through a reader or if an EMV chip is processed.

Examples of card not present transactions

There are a number of CNP transactions that you probably come across everyday. They include:

  • Online purchases, when a customer buys goods on the internet or through an e-commerce transaction.
  • Phone orders, when a customer provides the credit card information over the phone to your business.
  • Recurring payments that are set up to bill automatically.
  • Invoices that are paid online.