What Restaurant Owners Need to Know About Card Not Present Payments

Like many other major industries worldwide during the current COVID-19 pandemic, the restaurant industry has taken a significant revenue hit. Many big and small changes have taken place, one of which is how customers make payments. In the last couple of months, card-not-present (CNP) payments have increased in volume, demonstrating its growing influence on the industry.

If you’re not familiar with what CNP payments are and how they work, you may be at a disadvantage in understanding how it will impact the restaurant industry in the long run. Let’s dive in to get you up to speed!

What Is A CNP Payment?

Any card transactions made between you and the customer that does not involve a card reader are known as a CNP payment. Most CNP payments are made via email or phone, with the most common instances being online purchases, phone orders, recurring payments, and invoices.

For a payment to count as a card-present transaction, the client, the card, and the merchant must be present on site. If none of these instances exist, the payment is classified as a CNP transaction.

It’s not that CNP payments are a new concept—it has been in use for decades. The most common example of CNP payments in any industry is when customers pass their card details to a customer service executive over the phone when making payment for a purchase of goods or services. This allows customers to make payments even without being present at the scene.

How Are CNP Payments Handled Differently?

As customer payment behavior swings increasingly towards CNP payments, it’ll help you know how CNP payments are handled differently. Initially, there are several distinct differences in the way regular card payments and CNP payments.

The first noticeable difference between CNP and non-CNP payments are the higher interchange fees charged on the payment. Since the risks of fraud are higher in CNP payments, it results in higher interchange fees than card-present transactions. Scammers have an easier time getting away with CNP fraud since they or the card are not present at the venue.

Banks and businesses mainly protect themselves from CNP payment fraud by two methods—double-checking the CVN (Card Verification Number) and running the card against a database of blacklisted cards updated frequently. Some businesses use the AVS (Address Verification System) as an extra layer of security when taking CNP payments.

Tips for Accepting CNP Payments

Upon understanding the premise of CNP payments, the next step is learning to protect yourself and your business from CNP payment scams. To ensure that everything’s in place when accepting CNP payments, here are a few tips for choosing the right merchant service provider and accepting CNP payments that will give you a leg up:

  • Choosing the right payment processing: The payment process’s quality and security hinge mainly on your chosen payment processor. Selecting the suitable payment processors can streamline complexity and reduce costs for CNP Payments. There are many options for merchant payment services for restaurants available these days; take a look online.
  • Proper training: Even the best software won’t help if you don’t know how to run it properly. Keeping this in mind, you need to ensure that the staff responsible for taking CNP payments are well trained. Ensure they’ve all the task details like asking for the CVV code, verifying addresses and zip codes, etc.
  • Finding rates and terms that fit: Different merchant provider services have different rates and terms. Depending on your business and revenue, these terms may work for or against you. This is why you must find a merchant service provider with reasonable rates and terms.

Card brand fees and payment processor markups can also add up to the charges, so know the rates for these as well when setting up your CNP payment system.

Jump into the Current Trend

Hopefully your business weathered the worst of the pandemic and is ready to begin booming again. Since customer behavior has changed drastically in the last few months, you should adapt to the current trend to sustain. Hopefully, everything will get better soon. Until then, hang in there!

One thought on “What Restaurant Owners Need to Know About Card Not Present Payments

  • December 28, 2020 at 6:19 am

    As a savvy restaurateur, you likely already know that EMV technology is an excellent tool to prevent card-present transaction fraud. Luckily, there are steps your restaurant can take to help avoid sketchy situations when you accept card-not-present transactions. Let’s dig into a few of these.


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