MOTO Payment Processing

MOTO payments are purchases made using standard mail or over the phone. Specifically, the acronym MOTO stands for mail-order telephone orders. This type of payment is distinct from other types of purchases because both are considered card-not-present transactions.

How Do Moto Transactions Work?

MOTO transactions (Mail Order/Telephone Order) are a different payment processing method. They allow businesses to process card-not-present payments via phone or mail, providing flexibility for industries like catalog sales, as-seen-on-TV products, and subscription services. Moto payment processing works through a MOTO merchant account, where the merchant manually enters payment details into a secure system.

While MOTO transactions cater to customers who prefer non-digital options, they are considered high-risk due to increased fraud vulnerabilities and higher chargeback potential. Businesses that accept MOTO payments need specialized accounts and robust fraud prevention measures to ensure secure and efficient payment processing. Zen Payments offers tailored MOTO solutions, combining security and reliability to support diverse business needs.

How Does a Merchant Accept MOTO Transactions?

Taking MOTO payments involves several steps to ensure the process is secure, efficient, and compliant with industry standards. Here’s a step-by-step breakdown:

1. Obtain a MOTO Merchant Account

A business needs a merchant account designed for card-not-present transactions to start accepting MOTO payments. This account is a bridge between the business and the payment processor, ensuring that funds from credit card payments are securely deposited into the business’s bank account.

• Work with a provider experienced in MOTO transactions, like Zen Payments, to ensure proper account setup and risk management.

2. Set Up a Virtual Terminal

A virtual terminal is essential for processing MOTO transactions. This tool lets merchants manually input customer payment details via a secure online interface, such as credit card numbers, expiration dates, and security codes.

• Access the terminal through a payment gateway provided by your payment processor.
• Ensure the terminal complies with PCI DSS standards for securely handling sensitive cardholder information.

3. Collect Customer Payment Details

When taking a payment over the phone or via mail, gather the following key details:

• The customer’s card number (credit or debit card).
• The card’s expiry date and CVV/security code.
• The billing address associated with the card, as this helps verify the transaction.

Merchants must confirm that the information matches the cardholder’s account to minimize the risk of fraudulent activity.

4. Process the Payment

Once the payment details are entered into the virtual terminal, the payment processor verifies the information and authorizes the transaction. This step involves cross-checking the cardholder’s bank for sufficient funds and ensuring there are no red flags.

• If approved, the transaction is completed, and funds are transferred to the merchant’s account.
• If declined, follow up with the customer for alternative payment methods or corrected details.

5. Confirm the Order and Receipt

After the transaction is successfully processed, issue a confirmation receipt to the customer. Depending on how the payment was initiated, this can be done via email or mail. Clear communication helps build trust and prevents disputes.

6. Monitor Transactions for Security and Compliance

MOTO transactions carry a higher fraud risk. Regularly monitor your transaction data for unusual patterns, such as repeated declines or unusually large amounts. Ensure your business stays compliant with industry standards to avoid penalties.

By following these steps, businesses can efficiently accept MOTO payments and provide a seamless experience for customers ordering by phone or mail.

MOTO Merchant Account

A MOTO merchant account is a customized payment processing account for businesses that use card-not-present transactions through mail and phone. Because of the added security vulnerabilities, this is considered a high-risk merchant account.

For example, someone ordering over the phone may not be the person whose name is on the credit card. Alternatively, some customers who receive products with longer shipping times may regret ordering the item and ask for a refund. Nonetheless, you can obtain a MOTO merchant account by working with experienced credit card processors like Zen Payments, which offers a range of processing solutions.

Types Of Mail Order and Phone Order Businesses

Numerous products can be sold over the phone or via mail, many of which work hand-in-hand. Here is a list of the main types of businesses that take advantage of this classic form of payment:

1. As Seen On TV – This industry, by far, takes the cake regarding MOTO transactions. Still going strong with sales, companies like the Home Shopping Network (HSN) make it their goal to get potential customers to call in and order products. Payment is made over the phone, and the product arrives by mail in 2-4 weeks.
2. Health And Nutraceuticals – From testosterone pills, to age-reducing balms, many new products in this industry broadcast on standard cable channels and have special deals for customers who call in and order.
3. Subscriptions and Magazines – Magazines and newspaper subscriptions still rely on standard mailing services to broadcast their message. Often, they'll send an organized packet with a return address, a prepaid envelope, and purchase options for the type of subscription you're looking for. All you have to do is write a check.

Phone Order High-Risk Credit Card Processing

Phone orders can be risky for your average business model because there is a slight added fee to the transaction cost, and they are not the most secure. To elaborate, high-risk credit card processing has seen many changes over the years with the adoption of e-commerce sales, but MOTO transactions remain a classic example of why imposing added security has been beneficial to both the customer and the merchant.

In any case, mail-ordering and phone-ordering merchant accounts remain in high demand, and processors will continue to supply businesses of all sizes with the resources they need to transact.

MOTO Card-Not-Present

Card-not-present transactions are exactly what they sound like. They mean someone is paying for service without physically presenting their credit or debit card to the vendor. As you might figure, this is the opposite of a card-present transaction, which is a standard in-person purchase where a buyer slides, taps, or inserts their card into the reader.

Benefits Of MOTO Payments

By accepting MOTO payments, businesses expand their reach to customers who prefer non-digital payment methods or lack access to physical card terminals. Mail-order telephone (MOTO) payments offer flexibility by enabling merchants to process payments securely without requiring the customer’s physical presence. Through a virtual terminal, merchants can manually input the customer’s credit card details, including the card number, expiration date, and security code, ensuring a seamless transaction experience.

This approach caters to diverse customer needs and allows businesses to generate additional revenue streams by offering multiple payment options. Moreover, using a dedicated merchant account for MOTO transactions ensures secure handling of sensitive payment details, mitigating fraud risks. Partnering with a reliable payment processor enhances data security and supports compliance with industry standards, making MOTO payments a valuable addition to any comprehensive payment system.

Zen Payments provides robust MOTO solutions tailored to optimize business growth while ensuring secure and efficient transactions.

Drawbacks of MOTO Payments

While mail-order telephone (MOTO) payments offer convenience and accessibility, there are several drawbacks businesses should consider. One significant issue is the higher risk of fraud associated with card-not-present transactions. Without a physical card present, verifying the authenticity of the customer's payment details, such as their credit card number or expiration date, becomes more challenging. This increases vulnerability to chargebacks and unauthorized transactions, which can result in interchange fees and lost revenue.

Additionally, data security is a primary concern. Manually inputting card details through a virtual terminal or payment system requires stringent compliance with PCI standards to prevent breaches or mishandling of sensitive data. Failure to safeguard this information can lead to reputational damage and legal liabilities.

Another drawback is the potential for higher transaction fees than card-present transactions, as payment processors often consider MOTO payments to carry more risk. These fees and the time required to process payments may reduce profit margins, especially for high-volume businesses. Finally, MOTO transactions can sometimes lead to operational inefficiencies, as manually entering card details is more time-consuming than automated payment methods.

While MOTO payments can open doors to new customer segments, businesses must weigh these challenges and implement solutions to mitigate risks effectively.

Zen Payments is a Great Option for Merchants Looking to Offer MOTO Payments

MOTO transactions remain a valuable solution for businesses handling mail and telephone orders. By leveraging virtual terminals and secure processes, merchants can expand their customer base and enhance payment flexibility. While these transactions come with unique risks, the right high-risk merchant account provider, like Zen Payments, can ensure secure and reliable processing tailored to your business needs. Explore Zen Payments' solutions to accept MOTO transactions while safeguarding your operations seamlessly.