What does the term CNP stand for in payment processing?

The term CNP stands for Card Not Present in payment processing. This term refers specifically to a transaction where the physical card is not presented at the point of sale during the transaction. CNP transactions are commonly seen in e-commerce and over-the-phone payments, where the customer provides their card details, typically through a secure online form or by communicating the information directly to a sales representative.

CNP transactions are significant because they present unique challenges and risks compared to card-present transactions. For instance, there is a higher risk of fraud since the seller cannot verify the customer's identity through physical means. Therefore, various security measures, such as AVS (Address Verification Service) and CVV (Card Verification Value), are often employed to mitigate these risks.

Understanding the CNP scenario is crucial for payment professionals, especially in the context of fraud prevention, transaction authentication, and compliance with payment regulations.