CARD NOT PRESENT

Card-not-present (CNP), or non face-to-face, transactions are those where neither a payment card nor the cardholder are present at the point of sale, such is the case with orders by mail, telephone, fax or the internet.  NDMS has over a decade of experience working with CNP businesses. Our expert teams work with merchants to reduce fraud, decrease transaction costs, provide advanced product solutions and deliver superior customer service.  Why is this so critical to you as a merchant?

Higher Risk of Fraud

CNP transactions are becoming increasingly popular with customers, however, they unfortunately also appeal to criminals. As a merchant, you have no opportunity to physically check the payment card or the identity of the cardholder, so there is always some risk.

The fact that a transaction is authorized and an authorization code is issued does not guarantee payment. It simply means that the payment card has not been reported lost or stolen and there are sufficient funds in the account at the time of authorization. It does not guarantee that the address given to you by the cardholder is correct. If the sale is fraudulent, the full amount may be charged back to you.

Generally, if a merchant accepts a credit card for a purchase and the card is physically present, the liability for loss falls on the card issuing financial institution, not the retail merchant. However, under Card Association rules, the risk of loss falls on the merchant in all CNP transactions. What this means is that the full value of a CNP purchase will be charged back to the merchant if the credit card turns out to be a fraud. If the merchant is only making a modest margin on the sale of expensive items, even a small number of chargebacks for fraud can be devastating for a merchant.

In order to try and reduce the amount of fraudulent transactions that take place in a CNP environment, the payment card industry has established some measures to determine if the person using the card number is the genuine cardholder. A few of these measures are:

  • AVS (Address Verification Service)
  • CSC Checking. (Card Security Code)
  • 3D-Secure

Over the last few years there have been a variety of Payment Card Industry (PCI) initiatives brought forth by each of the different payment card networks, including Visa’s Cardholder Information Security Program (CISP), MasterCard’s Site Data Protection (SDP), American Express’ Data Security Operating Policies (DSOP) and Discover’s Information Security and Compliance (DISC) regulations.

NDMS, through its secure tier one processing platform and personal attention to your CNP business, can reduce your exposure to such illegal and detrimental activities as hacking, skimming, phishing and carding.

Credit Card Rate Categories

Card Not Present is the instance where the payment card in a sales transaction cannot be swiped. This type of transaction is also referred to as internet or MOTO, or a mail order/telephone order. All transactions where a credit card is not physically swiped through a terminal, including Internet transactions, telephone transactions or whereby credit card numbers are keyed into a terminal, fall into this category. Due to the added risk, the rates applied to process this type of transaction are higher. NDMS base rates for Card Not Present are only 1.99%.

Payment Gateways

A payment gateway is an eCommerce software that authorizes payments for e-businesses and online retailers. It is the equivalent of a physical POS – or point-of-sale – terminal located in most retail outlets. The gateway usually has two components: (A.) A Virtual Terminal turns your existing computer into a functioning payment terminal that secures multiple payment types. Virtual terminals allow a merchant to securely login and key in credit card numbers. (B.) Merchants have the website's shopping-cart connect to the gateway via an API to allow for real time processing from the merchant's website.

NDMS is committed to providing merchants with the most secure tools and best practices for payment gateways.