MOTO Payments: What, Why, and How?

When it comes to money, one payment method that has stood the test of time is Mail Order/Telephone Order (MOTO) payments. However, a lot has changed since MOTO payments began.

That is why we’ll begin by covering why businesses in 2025 should continue to use them, how they work, and their role in commerce, especially for high risk businesses.

What Are MOTO Payments?

MOTO is a type of payment where customers give their card details over the phone or through the mail to make a purchase. Despite the rise of online shopping, these payments remain an important option for many businesses and customers. 

Industries that commonly use MOTO payments include mail-order catalogs, telemarketing companies, subscription-based services, and businesses that take orders over the phone.

There are three main types of MOTO transactions:

1. Mail order: Customers send their payment information through the mail.
2. Telephone order: Customers give their card details over the phone.
3. Fax order: Customers send their payment information via fax.

The key difference between MOTO and other payment methods is that the card isn’t physically present during the transaction. This sets it apart from in-store purchases and even most online transactions where customers input their details directly into a website.

Why Use MOTO Payments?

MOTO payments offer several benefits for both businesses and customers. For businesses, they ensure:

1. Expanded customer reach: You can serve customers who prefer not to shop online or visit physical stores.
2. Convenience: Customers can make purchases from anywhere, anytime.
3. Increased sales potential: By offering another payment option, you’re less likely to lose sales due to payment preferences.

For customers, MOTO payments offer:

1. Ease of use: No need to navigate websites or travel to stores.
2. An alternative for those uncomfortable with online transactions: Some people still prefer human interaction or feel cautious about entering their card details online.

How a Card Not Present Transaction Works

A typical card-not-present transaction follows these steps:

1. The customer places an order by phone or mail.
2. A sales representative collects the customer’s payment information.
3. This information is input into a virtual terminal or point-of-sale system.
4. The payment is processed through a payment gateway.
5. The transaction is approved or declined.
6. If approved, the business can fulfill the order.

To process a MOTO payment, you’ll need the customer’s name, card number, expiration date, and CVV (Card Verification Value). Some businesses also request the billing address for added security.

Speaking of security, it’s crucial for MOTO payments. Businesses must use secure phone lines, encrypt data, and follow strict protocols to protect customer information. They should also use address verification and CVV checks to reduce fraud risks.

MOTO Payments and High-Risk Businesses

High-risk businesses are those that credit card processors and banks consider more likely to result in chargebacks or fraud. This can include industries like online gambling, adult entertainment, pharmaceuticals, and travel services.

High-risk businesses may face challenges when looking for a payment processor who’s willing to work with them, thus making card-not-present payments particularly beneficial. Many high-risk merchants find this method more accessible and extremely useful when other options are unavailable.

Implementing MOTO Payments in Your Business

To start accepting MOTO payments, you’ll need:

1. A merchant account that allows MOTO transactions.
2. A virtual terminal or point-of-sale system for entering card details.
3. A payment gateway to process transactions.

When choosing a MOTO payment processor, consider factors like fees, security features, ease of use, and customer support. Make sure the company can handle your business, especially if you’re in a high-risk industry.

Training your staff well is very important. They should know how to:

1. Properly collect and input customer information.
2. Secure sensitive data.
3. Recognize potential fraud and its red flags.
4. Handle customer queries about the payment process.

Compliance and Regulations

MOTO payments must comply with Payment Card Industry Data Security Standard (PCI DSS) requirements. This set of security standards helps protect card data. Compliance involves secure data storage, encryption, and regular security audits.

Other relevant regulations include:

1. The Fair Credit Billing Act, which protects consumers from unfair billing practices.
2. The Truth in Lending Act, which requires clear disclosure of lending terms.
3. Various data protection and privacy laws, which can vary by region.

Staying compliant isn’t just about avoiding fines – it’s about protecting your customers and your business’s reputation.

The Risks of MOTO Payments

The main risks associated with MOTO payments are fraud and chargebacks. Since the card isn’t physically present, it’s easier for fraudsters to use stolen card information. To combat this, businesses should:

1. Use address verification and CVV checks.
2. Be wary of rush orders or unusual purchasing amounts.
3. Implement strong authentication methods.

Chargebacks, where customers dispute charges with their bank, are also more common among MOTO payments. To manage these:

1. Keep detailed records of all transactions.
2. Communicate your products, pricing, and policies clearly and concisely.
3. Provide excellent customer service that can resolve issues before they become chargebacks.

It’s worth noting that MOTO payments often come with higher processing fees due to the increased risk. Businesses should factor this into their pricing and financial planning strategies.

How Electronic Transfer Inc. Supports Your MOTO Payments

At Electronic Transfer Inc., we pride ourselves on being a dependable ally in the realm of mail-order and phone-order businesses. We offer not only secure and efficient payment processing solutions but also a wide range of tailored services that enhance customer experiences and ensure secure and compliant transactions. 

Here’s what we offer with our MOTO payment services:

1. Easy mail and phone orders: We make it simple for customers to pay by mail or phone, handling both manual entry and secure card-not-present transactions.
2. Flexible payment options: We accept various payment methods, including major credit and debit cards, so customers can pay however they prefer.
3. Top-notch security: Our platform uses strong encryption and fraud detection to keep payment information safe.
4. Convenient virtual terminal: Process phone or mail payments easily by logging in and entering payment details securely.
5. Subscription management: Set up and manage recurring payments effortlessly for subscription-based services.
6. Real-time reports: Track sales and financial performance with instant reporting and analytics.
7. PCI compliance: We follow strict security standards to protect businesses and their customers.
8. Reliable support: Our expert team is ready to help with any questions or issues customers may have.
9. Customizable experience: We tailor our payment process to fit a company’s brand and customer journey.
10. Clear pricing: Our straightforward fees help businesses manage their costs effectively.
11. Easy integration: Our system works smoothly with existing setups, whether they’re online, offline, or both.

To set up our MOTO payment system, you typically need to:

1. Apply for an account.
2. Provide necessary business documentation.
3. Set up a virtual terminal or POS system.
4. Undergo a brief training on using the system and following the best practices.

Wrap Up

In a world of payment methods, offering alternatives is key. In fact, MOTO payments might just be the option that some of your customers prefer, therefore making it a valuable addition to the way you do business. By partnering with Electronic Transfer Inc., you can navigate the unique challenges of card not present transactions with confidence. We handle the payment details so you can concentrate on growing your business. Our MOTO payment solution is secure, efficient, and compliant.