Why does a keyed-in or online card payment cost a merchant more than a tapped one?
Summary
Because the card networks already charge more for it. Visa's interchange on a consumer credit card is 1.51% plus 10¢ in person and 1.89% plus 10¢ when the card is not present, and processors pass that gap on in their own price lists. At Chase, a card number typed in by hand counts as card-not-present even with the customer standing at the counter.
Where the gap starts
Interchange, the fee your processor's bank pays the card issuer, has separate categories for how the card was taken. Visa's U.S. table, effective April 18, 2026, and Mastercard's, effective April 17, 2026, put the same cards at different rates:
| Card | In person | Not present or keyed |
|---|---|---|
| Visa consumer credit, "All Other Products" | 1.51% + 10¢ | 1.89% + 10¢ |
| Visa debit, exempt issuer | 0.80% + 15¢ (CPS/Retail) | 1.65% + 15¢ (CPS/Card Not Present) |
| Mastercard Core consumer credit | 1.65% + 10¢ (Merit III Base) | 1.95% + 10¢ (Key-entered) |
| Visa debit, regulated issuer | 0.05% + 21¢ | 0.05% + 21¢ |
The last row is the exception. Regulation II caps debit interchange for large issuers, and Visa's table shows the same capped rate either way.
How providers pass it on
Chase publishes three rates: 2.6% plus 10¢ for tap, dip, or swipe; 2.9% plus 25¢ for ecommerce; and 3.5% plus 10¢ for manually keyed transactions, payment links, and invoices. Square's developer pricing lists 2.6% plus 15¢ card present and 3.5% plus 15¢ card not present, with 2.9% plus 30¢ for its ecommerce APIs. Stripe charges 2.7% plus 5¢ on its Terminal readers and 2.9% plus 30¢ online, plus 0.5% for manually entered cards. Helcim's interchange-plus markup, up to $50,000 a month, is 0.40% plus 8¢ in person and 0.50% plus 25¢ for keyed and online.
What it does to a real month
Picture a shop with $10,000 in card sales and a $40 average: $6,000 tapped at the counter, $3,000 online, and $1,000 taken over the phone and keyed in. On Chase's published rates:
The phone orders are a tenth of sales and cost more per dollar than anything else in the month.
A customer at the counter can still be card-not-present
Chase is explicit that keyed-in transactions count as card-not-present whether the customer is there in person or not, and that tap, insert, and swipe all count as card-present at the same 2.6% plus 10¢. Square draws the line the same way: a physical card or a mobile wallet is card present, and a card on file or a manually entered number is not. A chip that fails and gets typed in from the front of the card is billed as a remote sale.
Sources
- usa.visa.com/content/dam/VCOM/download/merchants/visa-usa-interchange-…
- mastercard.com/content/dam/mccom/us/business/documents/merchant-rates-…
- chase.com/business/payments/merchant-fees
- chase.com/business/payments/invoicing
- developer.squareup.com/docs/payments-pricing
- squareup.com/us/en/payments/our-fees
- stripe.com/pricing
- helcim.com/pricing
Related on this site
- Do online card payments cost more than in-person ones?
- Does a card payment cost the same at the counter, online, by invoice, and over the phone?
- What does a POS system really cost each month once card processing is included?
- Does a flat rate, interchange-plus, tiered, or subscription plan cost a merchant the least?
- Effective rate calculator
- What the headline rate leaves out
Written by Kaz (pen name). Figures are copied from providers' published pricing pages on the dates shown. We have not used these products. Corrections: contact form.