A card-present transaction, also known as a face-to-face transaction, refers to a type of payment where the physical presence of a payment card, such as a credit or debit card, is required at the time of purchase. In this type of transaction, the cardholder physically presents their payment card to the merchant or their representative, who then uses a card reader or point-of-sale (POS) terminal to process the payment.
Card-present transactions are commonly conducted in brick-and-mortar retail stores, restaurants, hotels, and other physical establishments where customers make purchases in person. The primary purpose of requiring the cardholder’s physical presence is to verify the authenticity of the payment card and ensure that the person presenting the card is the rightful owner.
During a card-present transaction, the merchant typically swipes or inserts the payment card into a card reader or POS terminal. The device reads the card’s magnetic stripe or chip and retrieves the necessary information, such as the cardholder’s account number, card expiration date, and security code. This information is then securely transmitted to the payment processor, which verifies the card’s validity and the availability of funds in the cardholder’s account.
One of the key advantages of card-present transactions is the reduced risk of fraud compared to card-not-present transactions, where the cardholder provides their payment card details remotely, such as for online or over-the-phone purchases. The physical presence of the card allows merchants to verify the card’s authenticity by comparing the cardholder’s signature, checking identification documents, or requesting a personal identification number (PIN) for added security.
Additionally, card-present transactions offer immediate authorisation and payment confirmation, allowing for a seamless and efficient checkout process. The customer can physically witness the payment being processed, ensuring transparency and reducing any concerns about unauthorised charges.
To facilitate card-present transactions, merchants must comply with industry security standards, such as the Payment Card Industry Data Security Standard (PCI DSS). These standards ensure that merchants handle payment card information securely, protecting both the cardholder’s data and the merchant’s reputation.
In conclusion, card-present transactions are face-to-face payments where the physical presence of the payment card is required. This type of transaction offers enhanced security, reduced fraud risk, and immediate payment confirmation. By adhering to industry standards and utilising secure payment processing systems, merchants can provide a seamless and trustworthy payment experience for their customers.