How presence changes everything.
WHAT CARD-PRESENT MEANS
The card is physically used at a terminal.
WHAT CARD-NOT-PRESENT MEANS
The details are supplied without the card: online, by phone, or stored.
WHY THE DISTINCTION MATTERS
It determines fraud liability, cost and authentication requirements.
WHAT CHIP TRANSACTIONS PROVIDE
Cryptographic proof the genuine card was present.
WHAT THAT SHIFTED
Fraud liability, generally to whichever party failed to support chip processing.
WHAT CONTACTLESS ADDS
Speed, with limits above which a code is required.
WHAT CARD-NOT-PRESENT CARRIES
Higher fraud rates, higher cost, and liability usually with the merchant.
WHAT THAT MEANS
Online merchants bear fraud losses that physical merchants frequently do not.
WHAT REDUCES THAT EXPOSURE
Strong authentication of the cardholder Fraud screening before authorisation Address and code verification, where supported
WHAT LIABILITY SHIFT MEANS
Authentication transferring fraud liability from merchant to issuer.
WHY THAT IS THE KEY COMMERCIAL REASON TO AUTHENTICATE
It converts an unbounded fraud exposure into a bounded one.
WHAT IT COSTS
Some completion rate, from added friction.
WHAT TO MEASURE
Fraud losses avoided against transactions lost.
