In addition to the visible data (the card number, the expiration, and the CVV), there is other information encoded on the stripe that you cannot see (its called

In addition to the visible data (the card number, the expiration, and the CVV), there is other information encoded on the stripe that you cannot see (its called Track 2 data). A swiped transaction will include the Track 2 data, but a keyed one will not. The Track 2 data proves that a physical card was present, which carries a far lower risk of fraud, and thus grants a lower processing rate. Notably, in the recent Target breach, the Track 2 data was stolen as well. This means the thieves could print up real, swipeable cards.