Why Online and Keyed Transactions Cost More to Process
Card not present fees, explained with Visa's own rate table: what an online or keyed sale really costs, when debit doesn't change, and how to close the gap.
Photo: Pixabay
On this page 9 sections
- What Visa's Rate Table Actually Shows
- Why the Networks Charge More When the Card Isn't There
- Keyed Sales Price Like Online Orders
- The Expensive Mistake: Downgrades
- Debit Is the Exception
- What Lowers Card Not Present Fees You Can't Avoid
- What Fixes Keyed Sales
- Network Fees Versus What Your Processor Charges
- A 20-Minute Statement Check
An online order costs more to process than the same card tapped at your counter because the card networks charge the card's issuing bank a higher fee, called interchange, when nobody can prove the card was there. You pay that fee through your processor. On Visa's current U.S. rate table the gap on an everyday credit card is about three-tenths of a percentage point. A card number typed in with missing data can cost more than twice as much as a tap.
Those numbers aren't guesses. Visa publishes its interchange schedule, and the version that takes effect October 24, 2026 makes the card not present fees gap easy to see. Below is what it says, where keyed sales fit, the one card type where the gap disappears, and what you can change without new software.
What Visa's Rate Table Actually Shows
Visa splits most of its consumer credit rates into card-present programs (numbered "2") and card-not-present programs (numbered "1"). For businesses in Visa's Small Merchant program, which covers merchants with no more than $280,000 in gross Visa consumer credit sales over the 12 months ending September 30, 2025, the general retail rows read like this:
| Visa consumer credit card | Card present (Small Merchant Product 2) | Card not present (Small Merchant Product 1) |
|---|---|---|
| Basic cards (Visa's "All Other Products") | 1.29% + $0.10 | 1.58% + $0.10 |
| Traditional Rewards and Visa Signature | 1.43% + $0.10 | 1.73% + $0.10 |
| Signature Preferred | 1.88% + $0.10 | 2.18% + $0.10 |
Two things stand out. The card-not-present premium is the same 0.29 to 0.30 points whichever card the customer carries. And the card itself moves your cost as much as the channel does. A premium rewards card tapped in store costs more than a basic card bought online.
Larger merchants are priced off different rows. Visa's general card-not-present "Product 1" rate runs from 1.89% + $0.10 for basic cards up to 2.60% + $0.10 for Visa Infinite cards that meet Visa's spend threshold. The pattern holds at every size: same card, no physical card, higher price.
Why the Networks Charge More When the Card Isn't There
A chip or a tap sends a one-time cryptogram that a thief can't copy from a stolen card number. A typed number proves only that someone knows it. That missing proof drives the price in two ways.
The first is fraud. Card numbers stolen in a data breach are worthless at a chip reader and perfectly usable at a checkout page. The second is who pays for it. When a fraudulent chip transaction slips through, the issuer usually absorbs it. When a fraudulent online order slips through, the dispute normally lands on the merchant, unless the sale was authenticated with a tool like 3-D Secure, which Visa sells to merchants as Visa Secure. Visa says authenticated transactions can shift liability for fraud chargebacks to the issuer.
So you pay twice for a card-not-present sale: once in the higher interchange rate, and again in the chargebacks you can't shift. Only the first of those shows up on your statement as a rate.
Keyed Sales Price Like Online Orders
Many owners assume that a card keyed at the counter counts as an in-person sale because the customer is standing right there. The network can't see the customer. It sees a typed card number and no chip data, and it prices the sale accordingly.
Visa's debit table shows this plainly. On debit cards from smaller, unregulated banks, a card tapped or dipped at a store qualifies for CPS/Retail at 0.80% + $0.15. Key the same card into the same terminal and it falls into CPS/Retail Key Entry at 1.65% + $0.15. That is exactly the rate Visa charges for an online debit sale.
Keying usually happens in a few predictable places:
- A plumber's tech reads the card number off a customer's card in the driveway because the truck has no reader.
- An office manager keys a contractor's deposit from a card number the client texted, which is also a security problem.
- A bookkeeper charges a client's card every month by typing it in rather than storing it with authorization as a recurring payment.
- A store clerk keys a card after the chip reader throws an error once, without trying tap.
Every one of those is a habit, which means you can change it.
The Expensive Mistake: Downgrades
The real cost of keying isn't the step from card-present to card-not-present rates. It's the step after that. A card-not-present sale only gets the rates in the table above if it meets Visa's CPS requirements, which include the data the issuer expects, such as an address verification request on keyed and online sales. Miss the requirements and the sale can drop to Non-Qualified Consumer Credit, which Visa prices at 3.15% + $0.10 on every card type.
Here is what that does to a single sale.
Illustrative example. Assumptions: a $200 sale on a Visa Traditional Rewards credit card, by a merchant in Visa's Small Merchant program, using the rates effective October 24, 2026. These are interchange costs only. Your processor's markup and network fees come on top. - Tapped in store (1.43% + $0.10): $2.96 - Online or keyed with full data (1.73% + $0.10): $3.56 - Online with a network token and Visa-recognized authentication (1.58% + $0.10 after Visa's 0.15-point incentive): $3.26 - Keyed without the required data (non-qualified, 3.15% + $0.10): $6.40
On one sale the difference is a few dollars. On $20,000 a month of keyed rewards-card volume, the same assumptions put the gap between clean card-not-present sales and non-qualified ones at roughly $284 a month, before markup.
Debit Is the Exception
Debit cards issued by banks with more than $10 billion in assets are covered by the Federal Reserve's Regulation II. That rule caps their interchange at 21 cents plus 0.05% of the sale, plus one cent for issuers that meet the Fed's fraud-prevention standard. Visa's table lists the regulated rate as 0.05% + $0.21 in every row, card-present and card-not-present alike. A $200 purchase on a regulated debit card costs about 31 cents in interchange whether the customer taps, types or orders online.
That cap is in legal flux. A federal court in North Dakota vacated the Fed's fee standard in August 2025, and that ruling is on hold while the appeal proceeds. A 2023 Fed proposal to lower the cap has not been finalized. For now the 21-cent cap is what issuers apply, but if you sell mostly to debit users it's worth watching.
What Lowers Card Not Present Fees You Can't Avoid
An online store can't make its web orders card-present. It can make sure each one qualifies for the best card-not-present category and the newer incentives Visa now pays for safer transactions.
Send complete data. Request address verification (AVS) on every online and keyed sale and collect the CVV. CVV doesn't change the rate category on its own, but it cuts fraud and strengthens your evidence in a dispute. You may never store it after authorization; the PCI Data Security Standard forbids it.
Turn on tokens and authentication. Visa's current table gives card-not-present credit sales a discount of 0.05 points for an EMV network token, 0.10 points for a transaction authenticated under Visa's Digital Commerce Authentication Program (DCAP), and 0.15 points for both. Small merchants get the same discounts on Small Merchant Product 1. Ask your gateway which of these your checkout already sends. Many merchants pay full price only because a setting is off.
Flag recurring and stored-card charges correctly. Visa has separate recurring rows. In the general table, Visa's lowest recurring tier for basic cards is 1.33% + $0.05, well below a one-off online sale. A monthly retainer keyed by hand as a fresh card-not-present sale misses those rows.
Settle every day. Late batches are a classic cause of downgrades. Set your terminal or gateway to close automatically.
What Fixes Keyed Sales
For keyed sales the cheapest fix is to stop keying:
- Put a reader where the customer is. A mobile card reader for field techs turns a keyed driveway payment into a chip or tap sale. On exempt debit cards alone, that cuts the percentage rate by more than half.
- Let the customer type their own card. A payment link or emailed invoice is still card-not-present. But the customer enters their own data, AVS and CVV get captured, and your staff never handles card numbers. Our guide to taking card payments over the phone safely covers the rare cases where you must take a number by phone.
- Use a virtual terminal that requires AVS and CVV. If staff do key orders, a virtual terminal with those fields set as mandatory stops the most common downgrade.
Network Fees Versus What Your Processor Charges
Everything above is interchange: what Visa says the merchant's bank pays the cardholder's bank. Your processor then adds the card brands' network fees and its own markup, and how it presents the channel gap depends on your pricing model.
On interchange-plus pricing you see the real category on each transaction, so a non-qualified downgrade shows up by name. On flat-rate pricing the processor sets its own published rates, often one for in-person sales and a higher one for keyed or online sales. Those are the processor's prices, not network rules, and a single blended rate means your tapped sales subsidize your online ones. Tiered pricing sorts sales into "qualified" and "non-qualified" buckets that the processor defines, which makes the channel gap the hardest to see. Our comparison of interchange-plus, flat-rate and tiered pricing explains how to read each one.
A 20-Minute Statement Check
Pull your last statement and look for three things. Find the share of volume billed as keyed, card-not-present or e-commerce. Find any line marked non-qualified, standard or "EIRF", which mean a sale missed its best rate. And check whether your recurring charges appear as recurring. If keyed volume is high, a reader on each truck or desk usually pays for itself quickly. Non-qualified lines usually trace back to one gateway setting. For a second pair of eyes on the statement, request a free processing review from MannyPay. A specialist replies within one business day.
Sources
- Visa USA Interchange Reimbursement Fees, rates effective October 24, 2026 (Visa)
- Regulation II (Debit Card Interchange Fees and Routing) (Federal Reserve Board)
- District Court Vacates Regulation II's Debit Card Interchange Fee Standard (Cooley, August 15, 2025)
- Visa Secure (Visa)
- PCI Data Security Standard (PCI Security Standards Council)
This article is for general educational purposes and is not legal, tax or financial advice. Card network rules and state laws change; confirm current requirements for your business.
