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26 Aug, 2021

Part 2: Is Apple Pay and Google Pay a Card Present or Card Not-Present Transaction?

The answer is both, or better yet it depends. But first some background.

There used to be a distinct line between card present and card not present payments. Card present transactions were where the customer was present with their card, and would swipe (or insert) their credit card to make a purchase, card not present transactions were online purchases, where both the cardholder and the card were not present.

Payments made using mobile wallets such as Apple Pay, Google Pay and Samsung Pay, fall under a third category called “cardholder present”. Payments made in stores via contactless card terminals with the cardholder present are considered card present transactions, even without any physical card. However payments made within apps or on the web are card not present transactions. Even though from a fraud standpoint, the same tokenization and biometric verification is done for an NFC (in store) transaction as an in-app transaction.

Next up: How do mobile payments actually work?