Card Not Present Transaction
A card-not-present transaction refers to any payment card transaction where the cardholder doesn’t physically present their card to the merchant. As mentioned earlier, advancements in technology and the growth of eCommerce have blurred the distinction between card-present and card-not-present transactions. The classification of a transaction as “card-present” no longer hinges on the physical location of the payment card. Instead, a card-present transaction occurs when the electronic data associated with the account is captured simultaneously with the sale. There are intricate criteria that differentiate card-present from card-not-present transactions.
For instance, consider a scenario where your store’s computer system experiences an outage. A customer wishes to make a purchase, and you resort to using an old manual imprint machine to create a physical imprint of the card. Despite physically handling the card, no electronic data is exchanged in this process. Consequently, it qualifies as a card-not-present transaction.
Alternatively, imagine a customer approaches the checkout counter but opts to use a mobile wallet app instead of presenting a physical payment card. This mobile wallet app facilitates interaction with your card terminal, leading to the exchange of electronic data during the transaction. In this case, it qualifies as a card-present transaction, even if the customer’s physical plastic card remains safely at home. Once again, the crucial determinant is whether information flows directly from the account to the merchant’s terminal.
Written by Andrii Vovk