Why are rates higher on transactions for Internet, Mail and Telephone Order sales?
There is far less risk of fraud associated with face-to-face transactions where the credit card is swiped by the merchant. Since there is such a minimal possibility of fraud involved, the processing banks can offer a great savings for these transactions. It is pretty rare that a person using a stolen credit card number will actually possess the physical card. To the processing bank there is far less chance of financial fraud and only the occasional possibility of chargebacks.
