Most owners know online payments cost a little more. Fewer realize that typing a card number into the terminal at the counter, because the reader would not work or the customer called in an order, can cost almost as much as an online sale. If it happens a lot, it quietly raises your whole rate.
Card present vs card not present
The card networks sort every sale into two groups. Card present means the card itself was at your counter: tapped, dipped into the chip reader, or swiped. Card not present means only the number was used: typed in, saved on file, ordered over the phone, or paid online.
Card-present sales are harder to fake, so the card's bank charges less for them. Card-not-present sales carry more fraud risk, so they cost more.
How big the difference is
Square's published rates show it clearly. The same card costs different amounts depending on how it is taken.
- Tapped or dipped$1.19
- Typed in by hand$1.55
- Paid online$1.62
With interchange-plus pricing the gap shows up in the card bank's fee instead of a posted rate, but the direction is the same.
The fraud risk is yours
When a chip card is dipped or tapped, the card's bank generally takes on the risk of a counterfeit card. When a number is typed in, the business usually carries the loss if the real cardholder later says they never made the purchase. That is called a chargeback, and you lose the sale plus a fee.
RelatedChargebacks explained
How to pay less on typed-in sales
- Fix the reader instead of typing around it. A worn-out chip reader can cost more in fees than a new one.
- Ask customers in the store to tap or dip. Keep typing for real exceptions.
- For phone orders, always enter the billing ZIP code and the 3-digit security code. A match can lower the card bank's fee and helps stop fraud.
- Send a payment link or invoice instead of reading numbers over the phone, so the customer enters their own card.
- For repeat customers, store the card securely once instead of typing it every time.
Common questions
Why does a manually entered card cost more?
Because nobody can prove the real card was there. Card banks charge more for typed-in sales to cover the higher fraud risk, and processors on flat pricing post a higher rate for them.
Is tapping a card cheaper than swiping?
Tapping and dipping are both card-present and usually cost about the same. They are also safer than swiping, because the chip creates a one-time code for each sale.
How can I tell how many of my sales are typed in?
Your statement or processor report usually breaks sales down by entry method, labeled something like keyed, manual, card not present or MOTO (mail order and telephone order). If it is more than a small slice, it is worth a closer look.