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Top 10 bundled payment gateway “card not present ” solutions

A card not present (CNP) transaction is in which physical credit is not given to the merchant and is conducted over the telephone, the computer, the mail, or a mobile device. The following is a comprehensive list of ten card not present transaction industry standards:

1. Best practice in general

These three general approaches can help retailers save money, minimize risk, and boost efficiency when processing electronic and direct payments. They are used for both card-present and card-not-present transactions.

Information presentation

Make your firm’s contact info prominently displayed on every page of a catalog, site, shipping material, and all personal correspondence. Customer contacts their card company if they didn’t access you regarding a problem, in a chargeback. A toll-free phone number and an email should be included in the contact information.

Data on cardholders 

Collect the customer’s daily and night phone numbers, as well as their email account. The delivery and billing address are different with transactions of value.

Data security for cardholders

Card fraud continues to be an issue, costing retailers, consumers, and financial institutions tens of billions each year. Cardholder data protection is complicated by several circumstances. And the risks differ for cards present and not present transactions.

2. Avoiding chargebacks.

When a client challenges a charge using their cards, a chargeback occurs. The customer calls the card provider and instructs your payment service to begin the procedure. Each chargeback you receive would almost definitely result in a cost from your processor. In most cases, if you can’t verify, you’ll have to refund the consumer.

Chargebacks are time-consuming, costly, and can jeopardize your merchant account. Chargeback percentages over 0.5 percent or 1.0 percent (by sale count) can result in significant disciplines, and high rates might lead to your merchant account being terminated with the prospect of card brand exile, depending on the card type. A small number of chargebacks indicates that you have some dissatisfied customers.

3. Fee structures, assessments, and interchange


Interchange is a fee which the merchant’s financial institution (typically represented by a payment processor) must give to the card-issuing bank on each sales transaction, as mandated by Mastercard and Visa. This fee is passed on to the merchant in some way by the acquiring firms or their processor. The interchange is a way for institutions to earn money by issuing Mastercard and Visa cards. Hundreds of different rates occur now, based on the transactions and industry type. Transfer often accounts for the vast majority of a trader’s total fees.


While interchange to card issuers, charges are directly paid to Visa and Mastercard and are used to defray the brand’ operating and regulatory costs. These charges paid to the business in some way usually make up such a small portion of the total fees.

Structure of fees

A bundled discount rate is being used by payment providers. In other words, they give the merchant a fixed percentage that includes all of the expenses listed above. Using the acronyms inside the graphic is stated in a formula: D = I + A + P. In this example, the retailer charges 2.26 percent for each eligible transaction by the payment gateways.

4. Service for Address Verification

AVS (Address Verification Tool) is an automatic fraud prevention program that helps to lower the risk of the card, not present transactions. By validating the cardholder’s billing address with the card issuer, AVS helps to reduce fraudulent activity. Each transaction must begin with the merchant initiating the AVS check by supplying card correct data. The verification enables the merchant to decide whether or not to approve the transaction or take further action.

The numeric element of the cardholder’s name and the ZIP code, also used by AVS in trying to access what you send to the payment processor. Your payment processor compares this data to the information stored by the cardholder’s issuing bank and other parameters (card information, expiry date, and generates an AVS confirmation Message.

Significance of AVS

  • A successful AVS answer is a way to resolve many “Unauthorized Use” and “Non-Receipt of Goods chargebacks merchants who execute card non present transactions have no challenge rights without the need for a positive AVS response.
  • Even if AVS fails, VISA operations that use it get a better interchange rate than someone who doesn’t; AVS isn’t perfect that should be used in conjunction with internally and externally fraud detection systems like CVV, CVC, CID, Verified by Mastercard, and Secure Card.

5. Security checks on the card

The major credit card companies created a verification system. To determine if the credit card used in a purchase is genuinely inside the hands of the owner. To prevent fraud for cards, not present purchasing the card verification value known by Mastercard, Visa, Discover, and American Express as CVV/ CVC, CMID, and CID proves that the buyer has seen. Or has seen a record generated by someone who saw the card. When the cardholder is not present during the transaction, many nations have made it mandatory to supply the code.

6. Descriptors for recurring payments, installment billing, and soft billing

Consumer spending on regular billing has been steadily increasing with time. Recurring payment models were also favored by card not present merchants as they make things more accessible. And provide predictable cash flows. 

Recurring payments

When a customer agrees to pay for the goods or product at periodic intervals over time, this is known as recurring payments. Membership numbers to fitness clubs, insurance premiums, energy bills, and subscription fees, for example, are predictable over time. The quarter payment may be equal or vary depending on the deal’s features. Recurring transactions can improve transaction timeliness, cut transaction costs, and lessen the chance of human error.

Billing in installments

Payments made on a recurring monthly billing plan are common. The length of these programs is set, and the repayments are usually the same. Payments are made weekly in three to ten payments. Installment billing is the direct response television (DRTV) market, as seen by phrases like “three easy payments.” card not present merchants can sell more products with fewer chargebacks because the transactions are small.

Descriptors for billing

Line items that show on card statements and describe the transactions are known as billing descriptors. By design, billing descriptors are usually static. They are consistent across all products marketed by the same company.

7. PCI DSS (Payment Card Industry Data Security Standard) 

The PCI Data Security Standard, often known as “PCI-DSS” is a secure protocol that applies to all significant international card brands, including Visa, Mastercard, Amex, Discover, and JCB. PCI is set up to protect cardholders’ personal information when in the custody, processing, or transmission of card not present merchants, payment systems, Merchant Solutions, and other organizations that store, process, or transmit credit card information.

8. Services for advanced authorization

Over the last century, bank card companies have developed new products aimed at specific groups. Rewards cards, prepaid debit cards, gift cards, and electronic reward transfer (EBT) cards are all well-known instances. These product lines have increased the number of data items in the payment flow.

The influx of data presents both obstacles in terms of managing approvals for lengthy profitability. It’s critical to have a payment processor with the capability to seize opportunities and mitigate risks at this pivotal moment.

9. Tokenization 

Security breaches are becoming more common than before. Merchants and processors of all sizes, regardless of size, are victims of data theft. Many breaches are sneaky that they go undiscovered for months or years after the original intrusion. Some of the customers are PCI compliant, demonstrating that compliance does not ensure security. New technologies are emerging that when used in combination with established PCI approaches. And regulations can considerably improve data protection while also lowering costs.

Protecting costs money.

Protecting yourself from a security breach could be a costly undertaking. Direct costs for both conformity and liability are paid by merchants. Insurance can cover the financial consequences of a security breach, but it rarely protects the professional image or valued client base. The expenses reduced regulation, liability, and brand harm by utilizing emerging technologies that reduce the chances of a security breach.

10. Negative marketing options

We’ve developed the following practical ways for leveraging adverse option marketing. That takes into account all regulatory and major cards brand issues.


Any productivity made on a merchant’s website should back up with evidence. Guaranteed results, fraudulent cures, losing weight promises, and other productivity claims are examples. Without written permission from the media outlets (MSN, CNN). The use of media logos is banned without a written permit, images and endorsements of celebrities are banned. Merchants must be prepared to back up comments on their websites. Websites cannot generate a false urgency. If clinical trial data is present, the firm running the trial ought to be distinct from the company offering the good or service. It is illegal to use the terms trial version or risk the trial if the customer is charged the retail price for the original after the case.


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