Credit Card Processing

What Is MOTO Payment Processing?

Read Time: 5 min

If you want to offer flexibility and convenience to your customers, providing a wide range of processing choices can help improve their experiences with your business. One common type of card payment is a MOTO payment. While not all businesses offer this type of transaction, it’s worth considering if you want to upgrade your current payment options.

So, what does MOTO mean? In this blog, we take a close look at MOTO payments, how they work, and why you may want to consider offering this to your customers. Let’s dive in!

What Is a MOTO Payment?

cafe worker taking a moto payment and inputting it into card machine

A MOTO transaction is a payment taken over the phone or via post, email, or fax. It is a type of card-not-present (CNP) transaction. With a MOTO payment, you or a staff member manually input a cardholder’s details to process the transaction.

For example, if you run a catering business and a customer wants to put a deposit down for an order but can’t visit your business in person, you can accept a MOTO payment over the phone. You will need a card machine or virtual terminal to process a MOTO transaction.

What does MOTO stand for?

MOTO stands for Mail Order / Telephone Order. This phrase outlines some of the various ways you can accept a MOTO payment.

How does a MOTO transaction work?

MOTO transactions can be accepted on a card machine or a virtual terminal. Let’s explore these options further:

Card Machine

  1. Enter the transaction amount on your POS system
  2. Input the customer’s card number, CVV2 code, and expiry date
  3. Select the CNP payment option or a manual entry option
  4. Wait for an approval message

Make sure to check your card machine’s instructions before accepting a MOTO payment. Each brand may have its own processes in place.

Virtual Terminal

A virtual terminal is a payment terminal that you can open on a traditional computer. This is a popular payment option if you have staff working on computers and you want them to be able to accept payments directly from your office via email, telephone, or order form.

With virtual terminals, the process is similar to card machines. Once you open your virtual terminal, you can input the card number, expiry date, and CVV2 code. With most virtual terminals, you will also need to enter the customer’s name, address, and other personal details to process MOTO credit cards.

Likewise, this payment option should only take a few seconds to process.

Why Your Business Needs to Consider MOTO Processing

If you currently only accept in-person payments, you might be wondering if expanding to MOTO payments is a necessity. Below, we take a closer look at the benefits and drawbacks of accepting CNP transactions:

Are there benefits to taking MOTO credit card payments?

Yes, below are the benefits of taking MOTO payments.

  • Enhance customer experience: MOTO payments make it more convenient for customers to pay for goods and services without visiting your store or office.
  • Avoid losing business: Businesses that don’t offer convenient payment methods may lose business to their competitors who will offer flexible credit card processing.
  • Increase revenue: Better customer experiences lead to more sales. When you add more payment options to your business, you can generate more revenue.
  • Easy to accept: Not only are MOTO payments easy for your customers but they are also easy for you. You can accept MOTO payments anywhere. All you need is a laptop or smartphone and internet access.

Are there any drawbacks?

While accepting MOTO payments can help you increase revenue and satisfy your customers, there’s no doubt that there are a few disadvantages.

  • Potential chargebacks: As MOTO payments do not require the card or cardholder to be present, it may introduce the opportunity for fraud and chargebacks. It is hard to verify that the cardholder is paying for your goods or services if you don’t have a physical card.
  • Higher processing rates: MOTO payments carry a higher risk due to the chance of fraud. The riskier a payment is, the higher the fees are.

Credit card fraud in the United States continues to be a major problem for small businesses and card issuers. Recent research suggests that around eight billion dollars worth of fraud is attempted on US credit and debit cards annually.[1]Security. “Credit Card Fraud 2021 Annual Report: Prevalence, Awareness, and Prevention”. Accessed May 31, 2022. If you allow MOTO payments in your business, it’s always a good idea to learn how to protect your business against chargebacks. This can help you save money and protect your merchant account.

How Much Will Taking MOTO Payments Cost?

There is added risk when accepting MOTO payments, your payment processor will charge a small premium for this feature. You can expect MOTO payments to cost you more than standard in-person credit card fees.

It’s not just payment processors that make MOTO payments more expensive – card issuers play their part too. For example, Mastercard recently hiked its ‘digital enablement fee,’ which is essentially a fee that allows Mastercard holders to pay for goods and services online.[2]Lexology. “Mastercard’s Digital Fee Hike Means Double Trouble for Merchants“. Accessed May 31, 2022.

Fortunately, merchant service providers are transparent about MOTO payment costs with the processors they set you up with. You may see this listed as a Card-Not-Present (CNP) transaction on a payment processor’s pricing list.

However, make sure to explore all the fees from your credit card processor, as they may have different fees for virtual terminals and other payment methods. If you don’t know what you will have to pay for accepting this type of payment, clarify this with your merchant service provider before you begin offering MOTO payments.

Do I Need a Merchant Account for MOTO Transactions?

There are payment service providers like PayPal or Stripe that allow for MOTO transactions via both hardware and software solutions.

However, while you can obtain MOTO transaction capabilities with payment service providers, there are many benefits associated with choosing a merchant account instead. With merchant accounts, you have more control over your payments and you won’t be restricted to sudden holds and high rates that you see with a payment service provider like Square. A merchant account will equip you with advanced MOTO payment solutions at a competitive rate.

a business owner taking a telephone order at a restaurant while typing into virtual terminal on laptop

How to Set Up and Accept MOTO Payment Processing

Since MOTO payments are considered high risk, it’s best to search for merchant service providers that understand high-risk industries and payments. Fortunately, no matter what type of industry your business operates within, there are dedicated high-risk merchant service providers that can help.

Why Take MOTO Payments: Final Thoughts

Now that you understand MOTO payments and their various benefits, it’s time to decide if you want to enable this payment option for your customers. If you don’t currently offer MOTO payments, it’s likely that your customers will find your lack of payment options frustrating. Speak to a merchant service provider about MOTO credit card processing today.

Article Sources

  1. Security. “Credit Card Fraud 2021 Annual Report: Prevalence, Awareness, and Prevention”. Accessed May 31, 2022.
  2. Lexology. “Mastercard’s Digital Fee Hike Means Double Trouble for Merchants“. Accessed May 31, 2022.


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