What is the Swiped Rate?
When you use a card reader, the bank knows that you have the credit card in your hand, have checked the cardholder’s identification (you are required to do this), and the cardholder is present to give you a signature (you need to do this too). This makes for a much safer transaction, for both you and the bank. In return they offer a much better discount rate on your transaction, 1.69% instead of the standard 2.2%. You are probably asking why you cannot get this better rate if you enter the data yourself. The bank will not allow this, the reason is that unless the data encoded on the magnetic stripe is transmitted to the bank at the time of the transaction (information that does not appear on the face of the card), they cannot be absolutely certain that you have the card in hand.
