Manual credit card charging involves manually entering a customer’s payment details into a processing system without physically swiping, dipping, or tapping the card. This is classified as a Card Not Present (CNP) transaction because the physical card is not read by an electronic terminal. Manual processing serves as an operational backup and a tool for remote sales channels. It allows businesses to accept payments when traditional point-of-sale methods are unavailable or when the customer is not physically present.
Understanding When Manual Processing is Necessary
Businesses rely on manual processing when electronic card reading is not possible or practical. This is common when a merchant’s point-of-sale (POS) equipment malfunctions due to a power outage or internet connectivity failure. Using a manual process ensures sales continue, preventing lost revenue and maintaining customer service during unexpected downtime.
Manual entry is the standard procedure for remote transactions, which fall under the Card Not Present category. This includes sales taken over the telephone, often called Mail Order/Telephone Order (MOTO) transactions. Businesses operating at remote locations, such as trade shows or field service sites, also use manual methods when they lack the necessary hardware or reliable network access for a standard terminal.
Essential Information Required for Manual Entry
To successfully process a manual credit card transaction, a merchant must collect specific data from the customer. Fundamental requirements include the full 16-digit primary account number and the card’s expiration date. The transaction amount and the cardholder’s full name are also necessary to initiate the payment request through the processing network.
For security verification, the three- or four-digit Card Verification Value (CVV or CVC) found on the card must be collected. The cardholder’s billing address, including the street address and ZIP code, is required for performing an Address Verification Service (AVS) check. This AVS check compares the provided billing information against the records held by the card-issuing bank, which prevents fraud in the CNP environment.
Using Digital Gateways for Manual Processing
The primary method for modern manual processing uses a Virtual Terminal, a web-based interface provided by the payment processor or gateway. This system transforms any internet-connected device, such as a computer, tablet, or smartphone, into a secure payment terminal. The merchant accesses the Virtual Terminal by logging into their processor’s online portal.
The user selects the manual entry option and inputs all required customer and card data, including the card number, expiration date, CVV, and billing address. The system prompts the user to ensure all mandatory fields for AVS and CVV checks are completed.
After details are entered, the merchant submits the transaction for authorization. The digital gateway sends the data to the card networks, which verify the funds and security details. This process provides an approval or decline response within seconds, allowing the merchant to complete the sale and provide a receipt.
Understanding Security and Compliance Requirements
Manual credit card entry carries a higher fraud risk than transactions where the card is physically present or a chip is read. Due to this elevated risk, all businesses processing these payments must adhere to the Payment Card Industry Data Security Standard (PCI DSS). Compliance involves operational and technical requirements designed to secure cardholder data throughout the transaction.
The Address Verification Service (AVS) and the CVV check are security tools that mitigate the risk associated with CNP transactions. A successful AVS match provides evidence that the person initiating the payment is the legitimate cardholder, which protects the merchant from liability in a dispute. Under PCI DSS, businesses must never store the CVV code after the authorization process is complete.
Physical Imprinting and Mail or Telephone Order Forms
While digital gateways are the norm, non-electronic, legacy methods exist as a last resort for manual processing. The physical imprinting machine, often called a “knuckle-buster,” is a mechanical device that creates an impression of the card’s embossed numbers onto a carbon-copy sales slip. This non-powered backup is reserved for situations involving total power or internet failure.
The resulting paper slip captures the card number, cardholder name, and expiration date, which the customer signs for authorization. The merchant must store this slip and manually enter the transaction details into their electronic system later, once connectivity is restored. For Mail Order/Telephone Order (MOTO) transactions, the business must maintain clear documentation, such as a recorded phone confirmation or a completed order form, to prove customer authorization.
Higher Transaction Fees and Proper Authorization
Manual, Card Not Present transactions incur higher processing fees than transactions completed with a physical card reader. This difference in cost is a direct result of the elevated fraud risk assumed by payment networks and issuing banks. Interchange rates for CNP transactions are set higher to compensate for the potential for fraud and chargebacks.
To protect the business against financial loss, obtaining and documenting clear customer authorization is necessary. Without the physical card and a signature, the merchant is more susceptible to chargebacks, where the customer disputes the charge. Maintaining a record of the customer’s verbal or written consent, along with AVS and CVV data, provides the documentation required to contest a fraudulent chargeback claim.