Why Card-not-Present Payments Cost More (and How to Reduce Fees)

Why Are CNP Payments More Expensive?

CNP transactions carry higher fees because they are considered higher risk by banks, card schemes, and payment providers.

Without physical verification of the card or cardholder, there is a greater chance of:

• fraud
• chargebacks
• disputed transactions

To account for this, acquirers apply higher processing fees.

The Key Factors Behind Higher Fees

1. Increased Fraud Risk

When the cardholder is not present, there is no way to physically verify:

• the card
• the identity of the payer

This makes CNP payments more attractive to fraudsters using stolen or compromised card details.

2. Chargeback Exposure

CNP transactions are far more likely to result in chargebacks.

If a payment is disputed:

• the funds are removed from your account
• you may lose both the revenue and the product
• additional admin and chargeback fees apply

The higher the risk of chargebacks, the higher the processing cost.

3. Lack of Authentication

Traditional CNP payments often rely on:

• card number
• expiry date
• security code

These details alone do not confirm that the transaction is being made by the legitimate cardholder.

Without authentication, transactions are classified as “non-secure”, which attracts higher fees.

4. Card Scheme and Acquirer Costs

Each CNP transaction passes through multiple parties:

• card issuer
• card network (Visa, Mastercard)
• acquiring bank
• payment gateway

Each layer adds cost, especially when the transaction is considered higher risk.

5. PCI DSS and Compliance Overhead

Handling card data directly increases:

• compliance requirements
• security obligations
• operational risk

This can lead to additional costs, including:

• compliance fees
• non-compliance penalties
• internal resource costs 

What Are “Non-Secure” Transaction Rates?

Many providers apply different pricing depending on how secure a transaction is.

• Secure transactions (authenticated) → lower fees
• Non-secure transactions (unauthenticated) → higher fees

If your business processes a high volume of unauthenticated CNP payments, your overall costs will increase significantly.

How to Reduce CNP Payment Fees

Reducing fees isn’t about avoiding CNP payments — it’s about reducing the risk attached to them.

1. Introduce Authentication

Using methods such as:

• 3D Secure
• Strong Customer Authentication (SCA)

helps confirm the identity of the cardholder and lowers fraud risk.

2. Avoid Manual Card Capture

Taking card details over the phone increases risk and often results in higher fees.

Secure alternatives reduce exposure and improve your risk profile.

3. Use Secure Payment Methods

Modern payment solutions allow customers to:

• complete payments on their own device
• authenticate transactions directly
• avoid sharing sensitive data

This improves both security and cost efficiency.

4. Reduce Chargebacks

Fewer disputes lead to:

• lower fees
• better standing with your acquirer
• improved long-term pricing

5. Keep Card Data Out of Your Environment

Removing sensitive data reduces:

• compliance burden
• risk exposure
• associated costs

How SOTpay Helps Reduce Costs

SOTpay is designed to reduce the risks that drive up CNP payment fees.

With SOTpay, you can:

• send secure payment links instead of taking card details manually
• enable authenticated transactions
• reduce fraud and chargebacks
• remove card data from your systems
• improve your overall risk profile with acquirers

Lower risk leads to more favourable processing rates over time.