For merchants a card-not-present transaction represents a significant risk. In the event of a chargeback it is on the merchant to prove the cardholder authorized the transaction, whereas if it was a card-present transaction (chip-and-pin or magnetic stripe) the onus is on the cardholder to demonstrate that s/he did not participate in that transaction.

There is a high volume of fraud in the travel industry (hotels and airlines) where shady unlicensed travel agents buy services online using stolen credit card details just to let those transactions be chargedback by the true cardholders after the services have been used or consumed.