The key difference between the two patches is that sew on patch requires to be sewed on your desired fabric. In contrast, the iron-on patch has an adhesive back, which tends to stick to your fabric whenever ironed.
A Sew-on patch is just like an embroidery patch. It is a more durable fabric material, and there is no glue on the backside of the patch; the back of the patch is the same as the front patch. But there is a difference in an iron-on patch. Iron patch has white cloudy color glue on the backside, just like a white plastic layer. It is hard to touch.
The iron-on patch is mostly affixed on the fiber by using the iron. Before fixing the iron-on patch, the iron temperature is set. Then iron-on patch is placed on the right spot, and on the surface, a small towel is used so that there is no serious damage on the patch with the heat or high temperature. The sticky material on the back of the patch melts and keeps it fix on the fabric. For example; Mostly military patches or badges are iron-on.