Card-Not-Present Fraud: Learn About This Scam Before You Accept Credit Cards On Your Website

As a business, if you accept credit cards on your website, then you definitely need to be aware of Card-Not-Present fraud (CNP).  Card-Not-Present fraud can occur when the cardholder does not or cannot not physically present his or her card to the merchant. This happens with mail order business, telephone orders, or online transactions.

The fraud can occur due to the fact that it can be difficult for the merchant to verify that the actual cardholder is authorizing the purchase. To accept credit cards on your website, proper verification of the cardholder is needed for your business’ success. The card security code system was put into place in order to reduce the number of occurrences of CNP.

Online Fraud

Face to face transactions are quickly giving way to the seemingly anonymous online methods. The online retailer is likely based out of state. The location of spending has very low significance in detecting known spending patterns.

Despite the common public perception, most credit cards are not compromised through website database hacking and other security breakdowns. Overall, most merchants take great care to protect and secure customer data. However when you accept credit cards on your website, utilize the utmost of caution.

Unfortunately, security breaches make great headlines and negatively influence the public’s perception of online shopping. Criminals use a variety of methods to gain access to credit card data, validate that the cards are active, and circulate the cards to perpetrate CNP fraud. Some of the more common methods are the following.


Phishing is a criminal activity that, as a merchant, you should be aware of before you accept credit cards on your website. Phishing occurs when fraudsters attempt to acquire sensitive information, such as credit card numbers, addresses, social security numbers, drivers’ license numbers, usernames and passwords by appearing as a trustworthy organization in an electronic communication.

Phishing is typically carried out by email or instant messaging. It directs users to provide the sensitive information at a website monitored by the criminals. Phone contact has been used as well. There are actionable ways to protect yourself from phishing scams.


Carding is a term used by criminals for a process they use to validate stolen credit card numbers. The criminals submit the credit card number and the cardholders’ personal data on a website that has real-time transaction processing. Typically, small monetary purchases are made in order to not attract the attention of a merchant and to preserve the credit limit on the card.

Once validated, the card number and related details will be sold to or exchanged with other criminals. They will then use the information to make larger purchases.

CNP fraud can be automated from a list of phished or guessed credit card numbers. It could be more targeted such as individual card skimming. When you accept credit cards on your website without utilizing proper verification tools, CNP fraud can lead to excessive chargeback rates and reduced trust in your brand.

We are an industry leader in the safety and security of online payments. Within our arsenal of services, we have the necessary platforms to assist merchants with all security needs.

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