What is a card-not-present transaction? Why plan payments are one

What is a card-not-present transaction?

Card-not-present is the industry's name. Visa's rules say card-absent. Visa defines a card-absent environment as one that meets any of these:

• The card and the cardholder aren't physically present at the merchant's premises, at a merchant without a fixed location, or at an unattended terminal.
• The payment isn't completed with an acceptance device (a card reader or terminal) or a manual imprint.
• The payment is completed using a stored credential, the card details a merchant keeps to charge later.

Visa's card-present environment is the reverse, and it requires all of its conditions to be met. A payment that misses any one of them is card-absent.

What counts as card-not-present?

• Online checkout. Visa calls these electronic commerce transactions.
• Mail and phone orders. Visa's definition is a card-absent purchase where the cardholder orders by telephone, mail or another means of telecommunication.
• Any charge to a saved card. Covered by the stored-credential part of the definition.

Are payment plan installments card-not-present?

Yes. Each scheduled charge uses the card the customer saved when they agreed to the plan, so it is a stored-credential payment and card-absent under Visa's definition. That holds even if the deposit was taken on a card reader at the front desk. The deposit is card-present, and the installments after it are card-absent. How the card is stored and charged later is covered in card on file.

Does card-not-present cost more?

Usually, yes. Card networks set interchange separately for card-present and card-absent payments. Visa's US schedule of 18 April 2026 lists these consumer credit rates for its general product programs:

On an installment of $1,108.33 on a card in Visa's all other products column, that is about $21.05 of interchange card-absent against $16.84 card-present. Merchants don't pay interchange directly. Visa notes that merchants pay a "merchant discount" to their own financial institution instead. See merchant discount rate. Visa also has industry programs with their own rates, so your payments may land in a different row.

On flat-rate pricing the rate you pay doesn't change with the row. Stripe's standard US price is 2.9% + 30¢ per successful domestic card payment, with 0.5% added for manually entered cards, such as a card number typed in during a phone call.

Who carries the fraud risk on a card-not-present payment?

Visa has a dispute condition just for it: 10.4, Other Fraud – Card-Absent Environment. An issuer can use it when the cardholder denies authorizing or taking part in a card-absent payment. Before filing it, the issuer must report the fraud to Visa. Visa's rules list cases where the dispute is invalid, so the outcome depends on the facts of each payment. See chargeback.

Can you add a fee to card-not-present payments?

Only within the networks' rules. Visa's convenience fee applies only to card-absent payments, but it must not be charged on a recurring or installment payment, so it doesn't fit plan payments. A disclosed credit card surcharge isn't excluded on installments, where your state allows it.

This page uses Visa's published rules. Mastercard and the other networks publish their own, and your processor applies them. General information, not legal advice.