MOTO merchant accounts, or mail order/telephone order, merchant accounts allow businesses to processing and accept credit card payments. Read this article to find out how MOTO merchant accounts work and merchant account tips for mail order or telephone order businesses.

MOTO stands for "Mail Order/Telephone Order," and MOTO Merchant Accounts are those that allow for credit card transactions that take place via phone calls and mail. These used to be the only two types of sales in which physical credit cards were not present, but now sales are also made via Fax and over the Internet. MOTO is distinguished from Internet transactions.

Merchants who accept MOTO orders generally do so because it serves their returning customers well or because it broadens their customer base. Nevertheless, in order to accept credit card payments from these customers, they have to have MOTO credit card processing merchant accounts. If some of the merchant's business is done with a card that needs to be swiped, then the merchant may wish to have both a MOTO merchant account and a swiped merchant account. If the MOTO orders are few and far between, the merchant may choose to key them into the terminal manually. 

Whereas for customers who place Internet orders, the critical information about a credit card is gathered automatically as the customer moves through the checkout process, merchants taking MOTO orders have to take the steps to verify the information that is essential for credit card processing security. For mail orders, this is facilitated by requesting the information on the order form. For phone orders, the information must be directly requested or reaffirmed from an existing account database. The information that it is crucial for the merchant to have for processing MOTO order through a merchant account are the cardholder's name, exactly as it appears on the card; the complete billing address of the cardholder, including the street, street number, and ZIP code, the card number and its security code, and the card's expiration date. If the shipping address is different from the billing address, that, too, must be noted.

When the data collected from the customer is entered by one means or another into the MOTO merchant account, the information is passed along a route that ends up at the customer's credit-card-issuing bank. The bank check's the card's validity, determines whether the amount that the customer wishes to charge is available, and checks for any suspicious circumstances surrounding the transaction. This may include comparing the location to the customer's address and the type and amount of purchase to the customer's purchase history. If a customer in Kansas is suddenly making purchases in Indonesia, or a customer who usually spends no more than $200 per month is suddenly attempting to buy $10,000 worth of electronics, the transaction is likely to be flagged and denied. Otherwise, the bank authorizes the payment by sending an approval number. 

As with other merchant accounts, MOTO merchant accounts are automatically settled each day, with profits being transferred electronically to the bank account of the merchant. The charges are stored in the customer's file and are presented on the next issued bill.