There are many options out there today for accepting payments. What to choose ultimately depends on the needs of a business.
Not to mention, at the time of this writing, businesses are seeking to accept payments without physical contact to respect social distancing and to address concerns about potentially contaminated surfaces.
For this reason, payment terms such as “card not present” and “contactless payment” have increasingly been thrown around.
So what do these terms really mean?
What is a Card Not Present Transaction?
If you’ve ever accepted payments online, then you’ve processed a card not present (CNP) transaction. Exactly as it sounds, it’s when neither the consumer nor the credit card is physically present at the time of purchase. Phone orders and mail orders are also in this category.
On the other hand, a transaction is card present only if—you guessed it—the cardholder is there in person with their credit card in hand at the time of payment. For example, a company with a brick-and-mortar location would likely have a point-of-sale terminal onsite to accept credit card payments from customers.
Mobile wallets such as Apple Pay and Google Pay are an excellent example of CNP payments when they are used for online purchases—but are considered card-present if they are used for contactless payments at a store (more on that later!).
When shopping around for CNP options, look for products like our Virtual Terminal, which lets you take payment information over the phone to process on any device that has access to a web browser. For more tech-savvy businesses, integration through an API or our Custom Checkout allows them to process through their website.
What is a Contactless Payment?
If you’ve ever tapped your credit card or held your smartphone over a point-of-sale terminal to make a purchase, that’s contactless payment in action. Contactless refers to the absence of physical contact between the credit card or smartphone and the POS terminal. (The consumers themselves are physically present for contactless payments.)
Made possible through near-field communication (NFC)—a subset of a radio wave technology that’s been used for decades for things like anti-theft car keys and scanning luggage for baggage claims—contactless payments create a fast and convenient payment experience. The consumer isn’t required to swipe their card or enter a PIN.
Most banks offer contactless “tap to pay” payment cards. Credit or debit cards which allow contactless payment typically have a wave-like symbol on the card to indicate the functionality.
NFC technology is also behind mobile payments. Mobile wallets like Apple Pay and Google Pay allow consumers to store their credit card information on their smartphones conveniently. They can pay by hovering their phone near a compatible card reader at the store.
Which Option is Right For Me?
Both of these payment options provide businesses and consumers with convenience and flexibility while addressing the need for payments without physical contact. To decide which option to go with depends on your business. If your business is strictly online, then CNP is for you. But if you also have a brick-and-mortar, you’d likely want to accept contactless payment as well.
To learn more about CNP and online payment options, give our team a shout! They are always ready to chat about all things payments.
