Online vs In-Person Payment Fees: What's the Difference?
If you accept both online and in-person payments, you've probably noticed the fees are different. Card-present transactions (in-person) almost always cost less than card-not-present transactions (online). Here's why.
Why in-person is cheaper
When a customer physically swipes, taps, or inserts their card, the risk of fraud is much lower. The card network can verify the card is present and match it to the cardholder. Online transactions carry higher fraud risk, so the interchange rate is higher.
Standard rates compared
| Method | Typical rate | Fixed fee |
|---|---|---|
| Online (card-not-present) | 2.9% + $0.30 | Per transaction |
| In-person (card-present) | 2.6% + $0.10 | Per transaction |
| In-person (keyed) | 3.5% + $0.15 | Per transaction |
Real cost difference
On a $100 sale, the difference between online (2.9% + $0.30 = $3.20) and in-person (2.6% + $0.10 = $2.70) is $0.50. That's a 16% savings on fees per transaction. Over 1,000 transactions/month, that's $500 saved.
Which processors offer both?
- Stripe — 2.9% + $0.30 online, 2.6% + $0.10 in-person via Terminal
- PayPal — 3.49% + $0.49 online, 2.29% + $0.09 in-person via Zettle
- Square — 2.9% + $0.30 online, 2.6% + $0.10 in-person
When keyed entry is necessary
If you take phone orders or manually enter card details, you'll pay the highest rate (card-not-present, keyed). This is because there's no card verification — the fraud risk is highest. Use this sparingly.
Which should you use?
If you have a physical location or meet clients in person, always use a card reader. The lower fees add up fast. For online-only businesses, focus on reducing chargebacks and fraud to keep your interchange rates favorable.
See the full comparison in Stripe vs PayPal vs Square and calculate your exact savings with our Stripe calculator or Square calculator.