What is A Card-Not-Present Transactions?

 

Card-not-present transactions are transactions that occur when a customer makes a purchase without being physically present. This includes online purchases, mail order/telephone orders, and recurring payments such as subscription services and automated bill paying. In these scenarios, the merchant does not see or handle the customer’s payment method (usually a credit or debit card).


This lack of physical contact can make it more difficult to detect fraudulent transactions. As such, extra measures must be taken to ensure that the transaction is secure and legitimate. Merchants may use additional security systems such as address verification services (AVS) and card verification values (CVV).


These tools help establish a customer’s identity and the validity of their payment method. Merchants should also follow best practices for processing card-not-present transactions and may opt to enlist the help of a third-party processor or payment gateway to increase fraud protection. By taking proper precautions, merchants can minimize the risk associated with card-not-present transactions and ensure a secure shopping experience for customers.


In addition, merchants should follow standard fraud prevention strategies such as keeping up-to-date with their customers' contact information and verifying the customer’s identity before processing a transaction. They should also be aware of signs of suspicious activity, including multiple orders using the same card in a short period of time or orders being placed from multiple IP addresses. By staying alert to these potential red flags, merchants can reduce the risk of fraud and chargebacks.


Ultimately, card-not-present transactions offer customers greater convenience when making purchases but also pose a higher risk of fraud for merchants. Merchants must take extra precautions to protect against fraudulent activity and provide a secure shopping experience for customers.


By following best practices for processing card-not-present transactions and staying vigilant against suspicious activity, merchants can keep their business safe while continuing to offer customers the convenience of online shopping.

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