What Is Keyed Entry? A Merchant's Guide

The Complete Definition

Keyed entry (also called "manual entry," "hand-keyed," or "MOTO" for Mail Order/Telephone Order) is a transaction method where the merchant manually types the customer's card number, expiration date, and other card details into a terminal or virtual terminal rather than using a card reader.

Keyed entry carries higher interchange rates than swiped or chip transactions because: - The physical card is not present or verified - No EMV chip cryptogram is generated - Fraud risk is higher — card numbers can be used without the physical card - Higher rates compensate issuing banks for the additional risk

Typical interchange premium for keyed vs. swiped: - Basic consumer credit, swiped: 1.51% + $0.10 - Same card, keyed: 1.80% + $0.10 - Premium for keying: 0.29% + $0.00

When keyed entry is legitimate and appropriate: - Phone orders (MOTO business model) - Virtual terminal payments for services - Backup when terminal reader fails - Keying emergency during chip read failure (though chip fallback is preferred)

When keyed entry is problematic: - Keying chip cards instead of using the chip reader (unnecessary downgrade and liability shift) - High rates of keyed transactions from businesses that should be card-present - Training issues where staff key rather than swipe/dip out of habit

How Keyed Entry Affects Your Processing Costs

Unnecessary keyed entry is an avoidable cost. If your staff keys cards when the chip or swipe reader is available, you're incurring unnecessary interchange costs and potentially shifting fraud liability to yourself.

Train staff: only key if the card absolutely cannot be read (chip fails multiple times, no magnetic stripe). All modern cards have chips — readers should be used.

For businesses that legitimately operate in a phone/mail order environment, keyed entry is appropriate and expected. In this case, focus on providing complete transaction data (AVS, CVV) to minimize the rate premium.

Keyed Entry Example

A gift shop has a card reader malfunction:
- Customers present chip cards, reader won't read chips
- Staff keys card numbers instead of calling for help
- For each $50 transaction keyed:
  - Keyed rate: 1.80% + $0.10 = $1.00
  - Swiped rate: 1.51% + $0.10 = $0.86
  - Extra cost per transaction from keying: $0.14
  - If 50 transactions are keyed that day: $7 in extra costs
  - More importantly: Merchant assumes fraud liability on chip cards not used with chip reader

Common Questions About Keyed Entry

Related Terms