Simply put: a Card-Not-Present (CNP) transaction is a purchase where the neither the customer nor their credit card is physically present at the time of purchase. A few common examples of CNP transactions include:
- Online purchases
- Recurring subscription renewals
- App purchases from your mobile device
As you can imagine, being able to accept credit cards without the card being physically present is a must for many business types. Are you one of those businesses? If so, how will CNP transactions affect your rates?
How do Card-Not-Present transactions affect your rates?
Aside from paying for the standard credit card processing fees, you will likely be responsible for higher interchange fees when performing a CNP transaction. The reason for this is that when the card or the card owner is not physically present, the risk for fraud and chargebacks generally increases. The higher interchange fees are designed to offset this risk.
So is it worth it to accept Card-Not-Present transactions?
The answer to this question is very subjective, and it really depends on the nature of your business and your arrangement with your credit card processing partner. Here are a few quick questions to ask yourself in order to find the best answer for you:
- Do you run an online business, process digital invoices, take phone orders, or run recurring payments?
- Does your credit card processing partner offer fair rates for CNP transactions?
If your answer to question 1 is yes, then you almost assuredly need to offer CNP transactions to ensure the success of your business. Your customers need a convenient way to pay after all!
If your answer to question 2 is no, then you likely need to look into finding a new credit card processing partner. At NXGEN, we offer fair rates and a variety of processing solutions that can be custom-tailored to your business type and needs. We even offer a zero fee credit card processing solution that will reduce your processing fees to 0%. If you are interested in comparing your CNP rates with projected rates with NXGEN, get in touch with us and we will assign a specialized payments processing agent to help you out!