Card not present is a term used to describe transactions where the physical credit or debit card is not present during a sale. These types of transactions occur when the clerk enters the credit card number in his computer or when a customer enters the credit card number from a different location. For instance, a customer will enter his credit card number online when he is trying to purchase merchandise over the internet.
Card not present transactions present a higher risk of fraud because the credit or debit card isn’t swiped through a card reading device. Therefore, the fees for card not present transactions are higher.