Why do card-not-present payments cost more than in-store payments?
Card-not-present payments cost more because issuers and schemes price in higher fraud risk and weaker evidence. Schemes publish separate interchange rates for each environment, and remote rates are usually higher outside regulated domestic caps. Fraud tools, authentication and chargebacks add further costs for the merchant.
In detail
Card-not-present payments cost more than in-store payments because every party prices in higher risk. Without a chip cryptogram, the issuer has weaker evidence that the cardholder is really there, and fraud rates are higher in remote channels.
Where the extra cost comes from
- Interchange: schemes publish separate rates for card-present and card-not-present. In Visa’s US schedule effective October 2026, a regulated debit card in a store carries 0.05% + $0.21, while an exempt debit card online carries 1.65% + $0.15.
- Cross-border caps: for non-European consumer cards used in the EEA, caps are 0.2% and 0.3% in store, but 1.15% and 1.5% online.
- Tools and losses: fraud screening, 3-D Secure, chargebacks and their fees.
In the EEA, domestic consumer interchange is capped at the same level in both environments, so the gap there comes mostly from fraud and operating costs. Operators selling one blended rate across channels should check their margin per entry mode. More in interchange fees, in Card-Present vs Card-Not-Present and on omnichannel coverage.