Do Key-Entered Sales Cost More Than Swiped Sales on Interchange Plus Pricing?

For most Visa, MasterCard, and Discover card types the answer is yes. In many cases, a card type will cost one interchange rate when swiped, a different, higher interchange fee when key-entered, and yet another interchange rate when accepted as an e-commerce transaction. Visa and Discover cards generally cary the same interchange cost for key-entered and e-commerce, while MasterCard transactions interchange fees on e-commerce sales are typically lower than on key-entered transactions.

However, there are a significant number of card types from each card brand that carry the same interchange cost regardless of whether the card is swiped or key-entered. The most common and widely accepted of these is Regulated Debit. Regulated Debit Interchange covers debit cards issued by banks with over $10 billion in assets. For many merchants, this card type can account for anywhere from 25 - 50% of total sales on payment cards. Regulated Debit transaction from all card brands have an interchange cost of 0.05% + $0.21 (plus an additional $0.01 if the issuing bank meets certain fraud prevention standards), regardless of whether they are swiped, key-enter, or e-commerce transactions. Regulated Debit cards also cannot be downgraded to higher interchange fees for missing data, late settlement, exceeding tip tolerances, etc.

Some other transaction types that carry the same interchange cost when swiped or key-entered include:

  • CPS Charity
  • Utility
  • Rewards 2
  • Level II & III Data
  • Most International Cards
  • Emerging Market Debit
  • Utility
  • Passenger Transport
  • Most International Cards
  • Level II & III Data
  • Recurring Payments
  • Public Sector
  • Emerging Markets
  • Passenger Transport