What Is CNP Rate On Merchant Accounts

Florence Carpenter

Can you process transactions even if you cannot confirm the customer’s identity or card legitimacy in person? The answer is yes! Modern payment processors allow merchants to process card-not-present (CNP) payments via virtual terminals and payment gateways. This practice is a must for remote companies and eCommerce businesses.

CNP rates are what gets charged to your merchant account each time a CNP transaction occurs. Since merchants cannot verify CNP transactions in person, they generally have steeper credit card processing fees. However, note that processors also follow varying rates. For instance, Square and Paypal charge a fixed 2.9% + $0.30, while options like Helcim have tiered plans ranging from 0.35% + $0.15 to 0.50% + $0.25.

Are Card-Not-Present Transaction Fees Worth It?

While processing CNP payments might hurt your profits, this system protects merchants and business owners like you. Processors use these fees to bolster their anti-fraud system. Some reputable, financially stable companies like Square and Paypal even have extensive programs to help trace fraud transactions.

Remember: CNP payments are very high-risk. Statistics even show that more than 75% of all cases of credit card fraud result from remote payment schemes. Furthermore, recovering lost data requires around $150. Losing just 1,000 pieces of data would set your company back by over $150,000!.

Most transactions that classify as CNP payments include:

  • Invoice payments via mail or invoicing platforms
  • Online purchases on payment gateways
  • Manually keyed-in phone orders
  • Recurring payments for subscription-based products and services

Consult your prospective payment processors for a more in-depth answer of how much CNP transactions cost. As we mentioned above, the rates vary on a case-by-case basis. Never assume the percentage rates. Even a $0.10 difference has a substantial effect on your profit margins and available cash flow.

Need a primer on the other fees involved with processing card payments? Processing Card can help! Check out our quick guide on the credit card fees that merchants typically pay. 

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