Card Not Present Transactions


For those unfamiliar with the term ‘card not present transactions’, and you’re curious to learn more - you’re in luck.

Below you’ll find the answers to some of the most frequently asked questions about the topic - including insight into how you can cater for card not present transactions in your own business.

What does "card not present" mean?


Starting with the basics - the definition of “card not present” relates to two things.

Person holding a card payment with laptop open to make a payment

  1. The payment card (as the term suggests!)
  2. The cardholder

An absence of these two things in the context of a financial transaction might seem strange - but it's more common than you think...

What is a CNP transaction?


A card not present (CNP) transaction is exactly that.

A payment that’s completed without the need for the cardholder to physically present their card at the point-of-sale. It’s really that simple.

From ecommerce and online invoices to mail order and phone payments - there are a variety of different examples of common card not present transactions; where merchants don’t need the card or cardholder to process payment ‘in person’, as it were…

Woman smiling working on a laptop

Card-Present vs Card-Not-Present


To make it easier for you to fully understand the difference, here’s a direct comparison between the types of payments


  Card-Present Card-Not-Present
Card machine payments Tick Cross
Digital wallet payments Tick Cross
Phone payments Cross Tick
Online payments (ecommerce) Cross Tick
Mail order Cross Tick
Recurring bills (e.g. monthly subscriptions) Cross Tick

Laptop screen open showing code on screen

How to accept 'customer not present' card payments


If you’re the sort of business that could benefit from accepting these types of payments, there are a few different options to explore.

The first is using a virtual terminal.

A virtual terminal enables the merchant to process the absent cardholder’s payment on their behalf while using an internet connected device (such as a tablet or laptop, for instance).

This is obviously a form an online payment - but many phone payments are processed via a virtual terminal.

On the subject of online payments though, nowadays - the internet is arguably the most common market for card not present transactions.

Many ecommerce websites in particular, use secure payment gateways to process payments. A payment gateway is essentially an online form where the customer can enter their card details to complete their purchase.

Alternatively, there’s the more traditional method when it comes to customer not present transactions. Customers who’d rather not disclose their payment details over the phone or internet can send a good old-fashioned invoice if they prefer.

Preventing "card not present" fraud


There are things that everybody can do to prevent card not present fraud. And by everybody - we’re talking businesses and consumers alike.

First of all, with customer not present card payments, there is always the threat that the payment details may have been stolen or obtained without the cardholder’s permission.

It goes without saying, but keeping your valuables safe prevents this type of crime from happening.

From the merchant’s point of view, customer not present transactions gain more credibility when businesses operate in a responsible manner.

This means that they follow the PCI compliance guidelines in place to ensure transactions of this nature remain safe and secure.

Tools for preventing fraud

PCI compliance is a business’s first line of defence against fraudulent activity. It outlines the industry-standard procedures a merchant should follow to protect their customer’s data at all times.

However, beyond the realms of PCI DSS compliance, which is usually dealt with by a company’s payment processing provider, there are a number of other safeguards in place to protect consumers against fraud.


Card Issuer Authentication

Sometimes, whoever you bank with will have their own security measures in place for card not present transactions.

You may have come across this when completing an online purchase, for example.

Once you’ve clicked through to buy, another window will open asking you for specific details. This is an example of card issuer authentication in action.

If the new window has the logo of your bank on it, you know it’s something to expect every time you use that particular card during a card not present transaction.

Obviously this varies depending on your card issuer.

AVS - Address Verification Service

AVS is the system used to verify the address of a person claiming to own a particular payment card.

This verifies the address provided for the payment against the card’s billing address. So, if the card was stolen - the perpetrator would need to know the actual billing address to complete the transaction.

It’s a simple yet effective security measure used for most online mail order transactions.

Card security code

Every card has one.

For Visa cards it’s usually referred to as a CVV2 code, while Mastercard cardholders will recognise it as a CVC2.

Either way, this is essentially the 3-digit security code on the back of your card.

This particular code exists specifically for card not present transactions - where you’re not required to enter your pin.

Question Mark and Speech Bubble

What is chargeback and what can you do to prevent it?


A chargeback (or cardholder dispute) is initiated by the Card Issuing bank and is a reversal of the original transaction; either at the request of the Cardholder or when the issuing bank sees the need to do so via the schemes. All payment processors are governed by scheme rules and regulations. Common reasons for chargebacks / reversals are:

  • Fraud – cardholder denies participating or authorising a transaction
  • Cardholder disputes the sale for reasons such as failure to receive goods or service
  • Cardholder disputes the sale for reasons of quality
  • Cardholder does not recognise a transaction


All merchants accepting debit and credit card payments run the risk of being liable for chargebacks. A cardholder or card issuer has the right to question or dispute a card transaction. A chargeback can be received up to 120 days after the card transaction was taken. In the case of goods or services being delivered, a chargeback can be raised up to 120 days from agreed date of delivery. Certain exemptions to the 120 days may apply depending on the Card Scheme and the reason for the dispute.

How much does it cost to process credit cards remotely?


As you may well expect - there are usually fees charged for CNP payment processing by the respective provider.

In many cases, this usually consists of three different types of credit card processing fees:

  • Interchange fees
  • Assessment fees
  • Standard charge from the provider

Obviously the charges will vary depending on the card issuer and also the payment processing provider you’re with.

Person working on a laptop

Why do card not present transactions cost more?


Card not present transactions will typically cost more to process because there are more security risks to consider.

The likelihood of running up chargeback costs is higher with CNP payments, which is why merchants will typically pay as much as they need to pay to their providers to ensure they have the right fraud prevention tools in place.

Start taking CNP transactions today

It’s easy to start taking card not present transactions across your business.

All you need to do is shop around in order to find the best processing deal for your business - whether that’s for online payments, phone payments or anything else.

You can even get in touch with us to discuss your options if you like?

We welcome any questions you might have about CNP transactions, and can also help you save money when switching card payment provider.

Financial disclaimer:

Terminal hire contracts are provided by Merchant Rentals Limited, who is authorised and regulated in the UK by the Financial Conduct Authority (FCA) for Consumer Hire under FRN 720500. Terminal hire can be for consumer hire and non-regulated hire contracts. Please check your contract carefully for details. Regulation of all consumer hire fall under the control of the FCA.

Handepay Ltd is authorised and regulated by the FCA for Consumer Credit under FRN 673564. Handepay is a credit broker for consumer hire not a lender.

Handepay acts as an introducer of card acquiring services on behalf of EVO Payments UK, the card acquiring service provider. EVO Payments UK is the trading name of EVO Payments UK Ltd, a payment institution that is authorised and regulated by the Financial Conduct Authority (FRN number 959332).

Existing Cards Businesses- The one-month rolling terminal hire contract from Merchant Rentals is only available to businesses that are switching from their current acquirer to EVO Payments UK arranged through Handepay.

New to Cards Businesses- The 12-month terminal hire contract from Merchant Rentals is only available to businesses that are new to card payments and wish to receive acquiring services from EVO Payments UK, arranged through Handepay.

The Next Day Banking Settlement service provided by EVO Payments UK incurs an additional fee of £4 a month on top of your acquiring service charges and fees. Provided your card machine performs a reconciliation before 12am (midnight), you’ll receive settlement of funds the next banking day.

Editorial disclaimer:

The information we provide does not constitute financial advice and might not apply to your business. Always carry out research into your business’ needs when choosing a new merchant services provider.

Sometimes, we link to other third-party websites to provide you with additional information. At the time of publication, we consider the information accurate, however, we do not have control over their content and are not responsible if any information on these websites change.

The products we display on our website are for illustrative purposes only - if your business requires additional facilities, you may receive a different model than advertised.

All of the information contained on this website, including fees, services and functionality, are correct at time of publishing. E&OE.