The Difference Between Swiping a Card and Keying in the Transaction



Even the most inexperienced entrepreneur soon learns that there are many aspects of payment processing companies and their associated fees that are confusing. Even the method by which the credit card information is communicated to the financial institution makes a difference.

Believe it or not, whether your customer swipes their card or you key in the numbers manually can lead to very different results.

What Is a Swipe Transaction?

The term “swipe” refers to the act by which a customer inserts their card in a reader or credit card machine for the purpose of making a payment for a product or service. The process can also occur via a mobile payment (or digital wallet); in this situation, the customer simply places their smartphone near the merchant’s near field communication-enabled reader.

In both of these cases, the card – or the electronic information relevant to a physical card that is now stored in a customer’s digital wallet – is present at the time of purchase.

What Is a Keyed-In Transaction?

By contrast, information about a customer’s credit card is sometimes manually keyed in by the merchant. For example, a handyman might make repairs in a person’s home, take down the person’s card information and enter it manually once he returns to the office.

Another common use of manually entered credit card information occurs when customers buy products online. It almost goes without saying that this form of making a payment poses numerous security risks.

The Advantages of Swipe Transactions

As stated above, swipe transactions occur when the customer is present. This single fact makes the process more secure than if the information were manually entered. In addition, the sheer act of keying in data carries with it the very real risk of human error.

While certainly not infallible, credit card terminals are highly unlikely to misread the numbers and expiration dates found on the customer’s card. Finally, because swipe transactions carry less risk, they are not burdened with the higher fees you would find with manually entered payments.

If you wonder why the charges for keyed-in transactions are consistently higher, remember that the payment processing company is in the business of making money. When a transaction is inherently riskier, the merchant is expected to compensate the processor for that added level of uncertainty. In short, it amounts to the price of doing business under adverse conditions.

How to Reduce the Fees You Pay

If you run a mobile business that currently involves keying in many of your credit card payments manually, there’s good news. Sure, you can look around for the lowest credit card processing fees in the industry and possibly save a few dollars here and there, but why not also upgrade your system to accept payments while you’re on the road?

With some easy-to-use software and an extremely portable reader that attaches to, or works with, your smartphone, you can safely and securely accept your customers’ “swiped” payments in person while on site with them. Never again will you be a prisoner to higher fees just because you needed to key in payments later in order to keep your loyal customers.

Accepting customers’ credit cards is a fact of life for today’s entrepreneurs. Whether you have been in business for years or are just starting out, it makes sense to do all you can to keep your costs down. By limiting manually entered transactions, you can increase your and your customers’ security while simultaneously lowering your costs.