What Is A Card-Not-Present Transaction?

Ordinarily, when you buy an item (or when a customer buys something from your store), you swipe a card through a POS terminal. With EMV cards, you have to stick the card in and pause a beat so the system can generate a one-time encryption code. It can take noticeably longer than swiping, but not by much, and it keeps your data safer.

You can also use your card at an ATM to withdraw money. In all these cases, it could be a credit card that gives you pre-agreed spending limit to be repaid later, with interest. Or it could be a debit card that draws cash directly from your bank account. Also, in the instances discussed so far, the physical card is physically present in the place where the transaction is taking place.

Paying from a distance

Sometimes though, you need to do a card payment while you–and, therefore, your credit card–in the place where the transaction is taking place. That’s called a card-not-present transaction, and it could fall into several categories:

• You’re shopping online, so you input your card number, expiry date, and CVV. The card might be physically in your hand, but it’s still a card-not-present transaction, because the business you’re buying from doesn’t get to physically touch your card.
  
• You are ordering over the phone, by fax, or through the mail.
  
• You set up a recurring payment.
  
• You are using a payment app on a smartphone or tablet.

Advantages of card-not-present activity

The clearest advantage is online shopping. Card-not-present is practically the only way to pay for items on the web. This way, buyers can pay directly on the site by typing their card details. So the obvious advantage is allowing you to serve online customers, whether they are too busy to make a shopping trip or if they are too far away to come in person.

For more information on card-not-present transactions, or to sign up for a merchant account, please call (888) 924-2743 or go to Charge.com.