What is a Card Not Present (CNP) Transaction?
What is CNP? Card-not-present transactions are financial transactions that do not require the physical presence of a card. Such transactions are considered high-risk because virtually anyone can conduct them. To perform such an operation, one needs to know the card details:
- Card number.
- CVV code.
Nowadays, CNP payments are carried out using the 3D-Secure protocol or similar. This is necessary to identify the person who is trying to complete the transaction, and this reduces the risk of fraudulent activity. If the protocols are not applied, then the responsibility for possible fraud lies directly with the card issuing bank.
One of the common problems associated with e-commerce is the violation of the rules for storing bank card data. Often e-commerce platforms store information on servers, and in the event of a hack, all user data will fall into the hands of third parties. This problem makes CNP fraud the second most common type of bank fraud after bank card counterfeiting.
Payment type “card not present” is convenient but not always secure. Many banks have developed a function prohibiting CNP transactions for customers who are afraid of possible fraud. In this case, it will be possible to pay for a product or service at a physical point of sale, or withdraw money from an ATM, only if you have a bank card. Without reading information from it, the transaction will not be processed.