Card-present (CP) fraud detection relies on physical card verification at point-of-sale terminals, while card-not-present (CNP) fraud detection uses behavioral analytics and transaction patterns for remote payments.
How It Works in Practice
- 1Validate physical card presence through EMV chip authentication and PIN verification for CP transactions
- 2Cross-reference device fingerprinting data against known fraud databases for online payment authentication
Common Pitfalls
Over-relying on EMV security for CP transactions ignores emerging threats like shimming and social engineering attacks targeting PIN compromise
CNP fraud models may violate GDPR Article 22 automated decision-making requirements if they lack human review mechanisms for high-value declines
Key Metrics
| Metric | Formula |
|---|---|
| CP Fraud Detection Rate | Detected CP fraud transactions / Total CP fraud attempts × 100 |
| CNP False Positive Rate | Legitimate transactions declined / Total CNP transactions processed × 100 |
| Average Detection Latency | Sum of all fraud scoring response times / Total transactions scored |
Related Terms
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