Glossary
Hand-Keyed Transaction
A hand-keyed transaction occurs when the data from a credit or debit card is manually entered into a payment terminal or point-of-sale (POS) system, rather than being automatically read by swiping the card through a magnetic stripe reader or inserting it into a chip card reader. This method is typically used when the physical card cannot be read by the terminal due to a damaged stripe or chip, or if the card is not physically present during the transaction, such as in telephone or mail orders.
Hand-keyed transactions are considered higher risk compared to those where the card is physically present and swiped or dipped. This is because the absence of the card makes it more difficult to verify that the person conducting the transaction is the legitimate cardholder. As a result, these transactions often incur higher processing fees and are subject to more stringent security checks by the merchant's payment processor to prevent fraud.
To minimize risks associated with hand-keyed transactions, merchants may implement additional verification processes such as requesting the CVV code (Card Verification Value), zip code, or other personal information that can help verify the cardholder's identity. Despite these measures, businesses must remain vigilant about the increased potential for fraud and chargebacks in hand-keyed transactions.