Card Present (CP) versus Card Not Present (CNP) Transactions

It’s no secret that the payments industry is rapidly evolving. In fact, gone are the days when customers would simply hand their credit card to a cashier in order to make a purchase. Today, there are a number of different ways for customers to pay for goods and services, including Card Present (CP) and Card Not Present (CNP) transactions. So which type of transaction is best for your hotel? Let’s take a look.

When guests create a booking for a hotel, they expect a smooth and frictionless experience. 

What is a Card Present (CP) Transaction?

Card Present payments refer to transactions where the card is physically present, as opposed to Card Not Present payments where the cardholder is not present (e.g. online bookings). 

There are several benefits of Card Present payments for hotels:

• Reduces the risk of fraud associated with Card Not Present transactions
• Processing fees are sometimes lower due to the lower risk of fraud

Essentially, CP transactions can help protect both the hotel and guest from fraud at times depending on how the hotelier processes these transactions (e.g. virtual terminal, physical terminal, etc.).

What is a Card Not Present (CNP) Transaction?

A Card Not Present (CNP) transaction is a type of payment that allows the cardholder to create a payment or booking without being physically present.

Card Not Present transactions can provide a number of benefits:

• Streamline the payment process for guests before their initial booking
• Reduce no-shows as guests are required to make a payment to the hotel before being present at the hotel
• Ability to automate your payments according to your booking terms and conditions when using Kovena (i.e. 50% Card Not Present payment upon booking and the remainder payment of 50%, one day before check-in)

Card Not Present transactions have higher processing costs that are passed to the merchant due to the higher chance of fraud and chargebacks affiliated with CNP payments as the guest is not physically present when creating the booking.

Which type of transaction is better for you – CP vs. CNP transactions

Both Card Present (CP) and Card Not Present (CNP) transactions have their own unique benefits that can be advantageous in different scenarios. With Card Present transactions, it may lower your transaction fees and reduce risk, but you may receive drastically more no-shows and not have a streamlined payment experience when guests check-in.

If you are a Property Management System, Booking Engine, Hotelier, or are in hospitality, please feel free to get in contact with us (click here) to learn more about how Kovena can streamline your payments with CP and CNP transactions.