🔹 Definition
Card-Not-Present (CNP) Fraud refers to fraudulent transactions that occur when a credit or debit card is used remotely—typically online, over the phone, or by mail—without the physical card being presented to the merchant. Because the merchant cannot visually verify the card or its holder, CNP transactions are more vulnerable to identity theft, stolen card data, and unauthorized use.
CNP fraud is one of the fastest-growing forms of financial crime globally, especially with the rise of e-commerce and mobile payments. It is a major concern in anti-fraud, cybersecurity, and payment compliance frameworks.
🔹 Frequently Asked Questions (FAQs)
Q1: How does CNP fraud typically occur?
Fraudsters obtain stolen card data through methods such as:
- Phishing emails or fake websites
- Data breaches at online merchants
- Malware or spyware
- Dark web purchases of compromised card data
They then use this information to make unauthorized purchases on websites that do not require two-factor authentication or additional verification.
Q2: What are common indicators of CNP fraud?
- Multiple failed payment attempts
- Mismatched billing and shipping addresses
- Unusual purchase volumes or high-ticket items
- Use of disposable emails or suspicious IP addresses
Q3: How can businesses prevent CNP fraud?
Prevention strategies include:
- Implementing 3D Secure (e.g., Verified by Visa, Mastercard SecureCode)
- Using fraud detection software with machine learning and behavioral analytics
- Enabling address verification (AVS) and card verification value (CVV) checks
- Monitoring transaction patterns for anomalies
Q4: What is the compliance impact of CNP fraud?
Businesses may face chargebacks, reputational damage, and even regulatory penalties if fraud is not properly mitigated. PCI DSS (Payment Card Industry Data Security Standard) compliance is essential for safeguarding cardholder data in CNP environments.
