Mail Order/Telephone Order (MOTO)

Mail Order/Telephone Order (MOTO) refers to transactions where the customer provides their credit card details over the phone or via mail, instead of in person or online. These are card-not-present transactions, as the merchant does not physically handle the card.

MOTO transactions require a different method of processing and carry higher risk, so they are often subject to higher processing fees. MOTO transactions are common in businesses that take orders via telephone or mail, including catalog retailers or food delivery services.

Due to the higher risk associated with these transactions, merchants must take extra precautions to verify the cardholder’s identity and ensure the validity of the transaction. For example, they may ask for additional information such as the billing address associated with the card or the card’s security code.

Merchants that process a high volume of MOTO transactions may want to consider using additional fraud prevention tools, including address verification service (AVS) or card verification value (CVV) checks, to help reduce the risk of fraudulent transactions.

Additionally, some payment processors may have specialized services or rates for businesses that primarily operate via mail order or telephone order, so it’s essential to shop around and find a provider that best suits the business’s needs.

Mail/phone order purchases begin when a customer decides to make a purchase without visiting a physical store or a website. Instead, the customer contacts the merchant directly through a phone call or by sending a mail order form. During the phone call, the customer provides their order details along with credit card information, such as the card number, expiration date, and sometimes the CVV code, to the sales representative. For mail orders, the customer fills out a form with their order and payment details and sends it to the merchant’s address.

Upon receiving the details, the merchant processes the payment by entering the provided information into a payment processing system designed for MOTO transactions. This might involve manual entry of the details into a virtual terminal or another payment processing software that allows for card-not-present transactions. After the transaction is authorized and approved, the merchant then confirms the order with the customer, processes the order for shipping, and provides an estimate for delivery time.

It’s important to note that throughout this process, security measures such as verifying the customer’s information and adhering to PCI compliance standards are crucial to protect against fraud and ensure the transaction is legitimate.