Card present and card not present

A card-present sale happens with the card or phone physically at the terminal. A card-not-present sale is online or over the phone. The distinction runs through everything behind the scenes: card-present transactions usually cost less to process and carry stronger protection for the merchant, because the card and often the cardholder were verified at the point of sale. Online, that protection has to come from authentication instead.

In practice

A card-present sale happens with the card or phone at the terminal. A card-not-present sale is online or over the phone. The distinction runs through everything behind the scenes: card-present transactions usually cost less to process and carry stronger protection for the merchant, because the card and often the cardholder were verified at the point of sale.

Online, that protection has to come from somewhere else — which is what Strong Customer Authentication and 3-D Secure are for, and why a properly authenticated online payment shifts most fraud liability away from you.

The practical consequence for a shop running both a till and a website is that the two have different fee profiles and different dispute risk, and a quoted rate that covers only one of them is not comparable to one that covers both.

Also called: CNP, card not present.

Questions people ask about card present and card not present

Why do card-present payments cost less?

Because the risk is lower. The card was there, the terminal verified it, and in most cases the cardholder authenticated with a PIN or a biometric. Card-not-present sales carry more fraud and more disputes, and the pricing reflects that difference rather than the cost of moving the data.

Who carries the loss on a disputed online payment?

It depends on whether the payment was authenticated. A properly authenticated online payment under Strong Customer Authentication shifts most fraud liability away from the merchant. An unauthenticated one usually leaves it with you, which is why exemptions are worth applying deliberately rather than by accident.

Can I compare a card machine rate with an online rate?

Not directly. A shop running both a till and a website has two different fee profiles and two different dispute risks, so a quoted rate that covers only one of them is not comparable with one that covers both. Ask for both numbers before deciding either is cheap.