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Processing Mail Order and Telephone Order (MOTO) Payments


In the US alone, the estimated market size of the Mail Order/Telephone Order (MOTO) industry is at $155 billion to account for the almost 28,000 MOTO businesses all over the country.

Mail Order/Telephone Order (MOTO) payments are Card-Not-Present (CNP) transactions. To be fulfilled, the shopper must provide both their personal payment information and their order information through regular mail, fax, or telephone.

It’s an older form of processing payments, and considerably more ‘high-risk’ than other types of transactions. However, it is quite popular with companies that sell products in large quantities or businesses that would prefer to sell their items through infomercials or catalogs. This is why merchant processors like Platinum Payment Systems continue to provide services that support these types of transactions.

MOTO Payments Explained

MOTO payments are credit or debit card payments taken over the phone, fax, or by mail. As a CNP transaction, the customer is not directly available at the point of sale. This means that they will need to send over the information required to verify their payment.

For merchants, it’s important to know that, to accept MOTO payments, you will need a merchant account that is compatible with MOTO transactions. Merchant accounts are provided by merchant processing service providers like Platinum Payment Systems (PlatPay). And, you can outfit this merchant account with whatever payment options you are willing to accept — be it only MOTO payments, or adding online payments, mobile payments, etc.

Standard MOTO merchant accounts are provided with a Chip and PIN terminal or a PDQ machine, rather than traditional credit card swipers, to process payments securely. 

The Advantages and Disadvantages of MOTO Payments

Despite being tagged as an ‘older’ method of processing payments, MOTO payments are actually characterized as being incredibly efficient. This is just one of the many advantages that it has over other payment methods, which includes the following:

  •       Quick, professional, and simple payment processing
  •       Non-restrictive and a great option for businesses that operate nationwide
  •       Secure logins and passwords provide an extra level of security
  •       Payments can be processed either through terminals or virtual gateways
  •       Processing can be performed by different employees at multiple locations

Now, as for the known drawbacks, the biggest would have to be the ever-present risk of fraud, which is higher for MOTO transactions than regular credit card payments. It should also be noted that, as a less-secure method of processing payments, there are additional costs associated with MOTO transactions (subject to the rates offered by your merchant services provider) that makes it slightly more expensive than other payment options.

How Does Processing MOTO Payments Work | PlatPay?

The process can greatly differ based on what types of services you choose, but the general process should be the same whether you’re working with Platinum Payment Systems or some other merchant processing company:

  1. Customer Initiates Processing It’s the customer that starts this process off. They’re the ones that call or post (through mail or fax) their payment information and their order for goods or services.
  2. Merchant Input After receiving the customer’s payment information and order details, it’s up to the merchant to enter this information into the POS terminal or the online payment gateway system provided by their merchant processor.
  3. Merchant Processor Processes Payment The next step involves your merchant processor. Again, be it PlatPay or another, they will be tasked with sending the payment over to the appropriate bank for authorization.
  4. Issuing Bank Authorizes Payment The card owner’s issuing bank is then brought into the mix to approve (by providing an authorization code) or decline based on whether the funds are available in the customer’s account.
  5. Payment Authorized If the payment is ‘authorized’, the merchant processor will receive the authorization code and, within 24 hours or so, the payment will be settled along with the rest of the transactions received by the processor for the day.
  6. Merchant Receives Payments In a couple of days, the payment should make its way into the merchant’s business bank account. Barring any complications, of course.

This process, although seemingly lengthy, is actually pretty quick! The first five steps happen almost instantaneously, and the only real wait comes once the authorization for the payment is received. At that point, the job is left up to the banks, which will transfer the money from the customer’s account to the merchant’s business account! 



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