Card-not-present interchange fees: will they stay high in 2026?

Online payments are more secure than ever. Tokenization is widely deployed. 3D Secure is mature in many markets. Device fingerprinting, biometrics, and real-time fraud scoring are standard in sophisticated ecommerce stacks. Yet card-not-present interchange fees remain higher than card-present interchange in most major markets, particularly in the United States.

So why have card-not-present interchange fees not come down?

That was the central question in a recent episode of Behind the Checkout, where John Lunn, Founder and CEO of Gr4vy, sat down with Anand Goel, Founder and CEO of Optimized Payments. The discussion cuts to the heart of an issue many merchants feel but struggle to explain.

As John framed it at the start of the episode:

“Why is interchange still higher for card-not-present transactions even though online payments have become more secure than they’ve ever been before?”

Let’s unpack the structural reasons card-not-present interchange fees remain high in 2026.

What card-not-present interchange fees actually pay for

To understand why card-not-present interchange fees stay elevated, you first have to understand what interchange is.

As Anand explains during the conversation:

“Interchange is the fee that merchants pay. They go to the issuing bank that issued that specific credit or debit card.”

Interchange compensates issuing banks for extending credit, funding transactions, managing fraud risk, and maintaining infrastructure. In the United States, it also funds consumer rewards.

Anand makes that explicit:

“It also pays for all the miles and the points that we love for using our cards.”

That detail matters. In credit-heavy markets, interchange is not just a risk-based fee. It is part of a larger economic model that supports cashback, airline miles, and premium card benefits. Card-not-present interchange fees are embedded in that system.

Historically, ecommerce was riskier. Card-not-present transactions were associated with mail order and telephone order. Fraud controls were limited. The pricing reflected that reality. Higher interchange was justified by higher fraud.

The problem is that the infrastructure that set those rules was built decades ago.

The fraud argument still drives card-not-present interchange fees

When EMV chip technology was adopted in the United States, counterfeit fraud in physical stores dropped sharply. Fraud did not disappear. It shifted online.

Anand explains the shift clearly:

“Card present fraud has dropped substantially… and card-not-present fraud remains relatively higher.”

From a macro perspective, that remains true. Card-not-present fraud rates are higher than card-present fraud rates on average.

But averages hide complexity.

Fraud is not uniform across ecommerce. It varies significantly by merchant category, geography, transaction value, and authentication method. A small-ticket recurring subscription does not carry the same risk profile as a high-ticket cross-border electronics purchase. Yet both often sit under the same card-not-present interchange umbrella.

John challenges the security assumption directly during the episode:

“Let’s be honest, a card with no signature on it held by a different person walking into a store versus you’re online, your device is fingerprinted, you’ve got a passkey running, 3D Secure has verified you with your bank. How is that more secure?”

It is a fair question. Modern ecommerce transactions often include device-level authentication, tokenized credentials, behavioral analytics, and step-up authentication. In many scenarios, the identity verification is stronger than a simple chip-and-PIN or contactless tap.

Yet card-not-present interchange fees have not meaningfully adjusted to reflect those advances.

Liability and pricing are not aligned

Another reason card-not-present interchange fees remain high is the way liability is structured.

In most card-not-present transactions, merchants bear the liability for fraud unless a transaction qualifies for liability shift under specific authentication rules. That means merchants absorb chargebacks and associated costs. They also pay higher interchange.

As Anand points out:

“The way the ecosystem is set up today, not only does the merchant own the liability of fraud, but they also have to pay higher interchange fees.”

In theory, higher interchange should compensate for higher issuer risk. In practice, the merchant frequently carries the operational fraud burden in ecommerce while still paying a premium rate.

3D Secure and other authentication technologies were meant to introduce better alignment by shifting liability in certain cases. However, the base pricing structure of card-not-present interchange fees did not fundamentally change.

The incentive to invest in stronger authentication exists, but the reward is not a structurally lower interchange category.

The NFC paradox and outdated categorization

One of the most revealing parts of the discussion centers on mobile wallets.

If a customer taps their phone at a physical terminal using NFC, that transaction is treated as card-present and receives lower interchange. If the same customer uses the same phone, authenticated by biometrics, to complete an in-app purchase, that transaction is treated as card-not-present and carries higher interchange.

John highlights the inconsistency:

“If I have my phone and I’m using an NFC transaction versus going on an app and making a purchase, they’re both getting authenticated because it’s through biometrics… why are there different fees?”

Anand’s response is candid:

“I think I agree with that they should be… the issuers and the network should give it consideration, and currently they don’t.”

This exposes a structural issue. Interchange categories are still built around whether the card is physically present, not around actual risk signals. Technology has evolved faster than pricing logic.

Why risk-based interchange pricing has not materialized

Given the data available to issuers today, risk-based interchange pricing seems technically possible. Issuers can see fraud performance, authentication strength, and customer behavior patterns.

Anand acknowledges the opportunity:

“Issuers have so much more data than they ever had before where they theoretically could consume that data to make risk-based pricing decisions.”

Uniform pricing persists because the system was designed decades ago and because market incentives are powerful. Higher card-not-present interchange fees support issuer revenue, which in turn supports rewards programs. In a credit-driven market like the United States, those rewards shape consumer behavior.

Lowering card-not-present interchange fees would not only affect fraud economics. It would ripple through rewards ecosystems and competitive positioning among issuers.

Competitive pressure from alternative payment methods

If card-not-present interchange fees do not adjust to reflect modern risk controls, pressure will not come from regulation alone. It will come from market behavior.

Anand points to growing merchant responses:

“I’m seeing more and more… incentives or disincentives that drive consumer behavior.”

He describes telecom providers and insurers offering discounts for ACH or bank debit autopay. He notes restaurants adding card surcharges. He highlights grocery chains that reward customers for linking bank accounts instead of using cards.

These shifts are not ideological. They are economic.

Unchecked increases in interchange and scheme fees push merchants to experiment with alternative rails. Real-time payments and pay-by-bank models are becoming more viable. Consumers respond to incentives. If merchants share savings through discounts or loyalty points, behavior changes.

Cards will not disappear. Credit remains valuable. Rewards remain powerful. But sustained pressure on card-not-present interchange fees increases the attractiveness of alternatives.

Will card-not-present interchange fees fall by 2030?

The most realistic outlook is gradual evolution rather than sudden reform.

In some markets, regulators have capped interchange. In others, networks are experimenting with authentication-linked incentives. There are early signs of pricing differentiation tied to secure flows in specific regions.

But as of 2026, card-not-present interchange fees remain structurally higher because of three forces.

First, fraud shifted online after EMV, and aggregate statistics still justify higher baseline pricing. Second, legacy infrastructure and categorization persist, even as technology outpaces them. Third, issuer revenue and rewards economics depend on maintaining certain interchange levels.

Until those dynamics shift meaningfully, card-not-present interchange fees will likely remain elevated.

Watch the full discussion

This article captures the core themes, but the nuance is in the full conversation between John Lunn and Anand Goel.

If you are evaluating your ecommerce cost structure, planning authentication investments, or considering pay-by-bank incentives, the full episode is worth your time:

Understanding why card-not-present interchange fees stay high in 2026 is not just about frustration. It is about strategy. The more clearly merchants understand the economic structure, the better positioned they are to optimize routing, authentication, and alternative payment adoption in the years ahead.

What this means for your ecommerce strategy in 2026

As the conversation between John and Anand makes clear, the opportunity is not just to complain about higher card-not-present interchange fees. It is to rethink how payments are structured, routed, and optimized across channels.

If you want to reduce your ecommerce payment costs, improve authorization rates, and gain more control over how transactions are processed, Contact Gr4vy to learn how payment orchestration can help you take control of your payment stack in 2026 and beyond.