Difference Between Card Present and Card Not Present Transactions

Card Present vs Card not Present

Every business out there looks forward to running efficiently. At the same time, the objective of a business enterprise is also to ensure the overall savings while gaining the most of its resources as well as optimizing the respective operations. However, in some cases, without even realization, businesses tend to leave money –the amount that they could have saved easily.

For instance, you can consider home services and delivery businesses. While attempting to surpass the competition and maximizing profits, the given merchants keep overlooking transactional costs along with the overall risks of frauds related to payment cards. All of these could have an adverse impact on the overall operating costs while affecting the bottom line profitability.

As such, it is important to understand the difference between CP (Card Present) and CNP (Card Not Present) transactions. Let us have a look into the same in this post.

Benefits of a CP Transaction Over CNP Transaction

CNP transactions tend to be beneficial in the modern e-commerce business environments. Here, they help in adding convenience of ensuring payments for goods on some online portal. Merchants can also consider using CNP for the collection of recurring payments from the respective customers for advanced forms of subscription-based services like gym memberships. This is because it can help in covering the overall hassles of the collection of payments every month in person.

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However, in the modern sales environments wherein the merchant has the chance to collect payments physically from the respective customers, it is recommended that CP transactions might be preferred. This is because they are highly secure. In the given transactions, both the cardholder and the card tend to be physically present for validating the overall authenticity of the given transaction. They serve to be a better option while offering many benefits. Here are some:

• Cost Savings: In a typical CP transaction, the issuer is responsible for charging a low fee to the merchants in comparison to the CNP transaction. When you consider adding other variables –like the increased number of transactions on a daily basis, the overall savings with the help of CP transactions are only going to increase. In a price-competitive and cost-competitive industry like the pizza business, this helps in making a strong case for the modern CP transactions. For estimating the overall savings of your business, it is recommended to make use of a reliable ROI calculator for observing how much money your business is capable of saving through the conversion of CNP transactions to the respective CP transactions.
• Security: When consumers are providing the respective debit or credit card information over the smartphone, there always happens to be an opportunity of the details getting compromised or handled in the insecure manner. However, when it comes to a CP transaction, the card for payment for never leave the sight of the consumers. An mPOS or payment terminal device would allow the customers to complete the respective payments with EMV chip or PIN or even both for verifying the card’s authenticity. This helps in providing stronger protection while making the consumers feel more comfortable as well as secure while using the card.
• Improved Customer Experiences: When C P transactions are offered with the help of mPOS solutions, the staff is able to better engage with the end consumers during the delivery of some product or service. This helps in creating an improved brand image while increasing the overall chances of turning customers into repeat, loyal buyers.
• Up selling Opportunities: A CP transaction is known to deliver your staff the opportunity of upselling additional products as well as services during the collection of payments. This would potentially help in increasing the revenues while including additional value to the overall experience of the delivery services.

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Fraud Risk Implications

Traditionally, credit card service providers have regarded as the CNP transactions to be riskier in comparison to the CP transactions. This is because conventionally, just knowing a credit card number was ample when it came to some fraudulent purchase over the phone or online.

For combating the overall fraud risk, the card payment industry has gone forward with investing in major technological upgrades for making CNP transactions highly secure. For instance, most online payment service providers out there are known to help merchants in getting additional verification from the cardholders like the requirement of the correct billing address or the CVV code of the card. The given code is only situated on the physical form of the card. Therefore, it becomes practically impossible for any potential cyber criminal to get access to the code accurately.

With the help of reliable partnerships with some secure online payment company along with setting up the respective payment form for optimum fraud prevention, one can significantly look forward to minimizing the overall risks of frauds. Online payment solutions are capable of shouldering the overall burden of storing the credit card date of the clients. This helps in eliminating the overall requirement of storing sensitive information on the respective devices.

A majority of reliable payment solutions out there are known to be equipped with advanced forms of data encryption while being regularly audited by some security expert for ensuring that the respective systems are capable of protecting the data properly.

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In the modern era, the overall benefits of providing the clients with a wide range of comfortable payment options make it worthwhile when it comes to accepting both CNP as well as CP transactions. For improved security, it is recommended to work with the payment processors for requiring clients to enter the respective CVV code of the card for completing online transactions.

Impact on the Processing Rates

CP versus CNP transactions are also known to affect the overall processing rate that you will be paying on the given transaction. In general terms, CP transactions are known to feature lower rates in comparison to the CNP transactions. However, the overall higher rates are worthwhile the trade-off when it comes to offering a highly convenient mode of payment.