Ever had a situation where a customer needs to pre-pay for a good or service you offer? Enter Mail Order/Telephone Order (MOTO) transactions. This card-free method allows you to process payments remotely.
In our complete guide, we’ll fill you in with everything you need to know to start accepting these transactions in your business. We’ll also cover which businesses might accept MOTO payments and some potential risks to keep in mind.
What is a MOTO Payment?
Mail Order/Telephone Order (MOTO) payments are a type of remote payment transaction allowing businesses to accept payments when a customer’s card is not physically present. When MOTO payments are carried out, a customer shares their payment details with a business.
As the name suggests, this can be done via mail or by telephone. These details can even be shared via encrypted web forms. Once the merchant has a customer’s card details, they can enter them into an EFTPOS terminal and complete a payment.
In line with regulation, merchants must not store these details under any circumstances.
What Are the Benefits of MOTO Payments?
Why might you consider accepting MOTO payments for your business? It’s important to note that these are considered higher-risk payments due to not having the payment card physically present. However, there are a number of reasons why your business might consider extending these as a payment option for your customers. Here are some reasons:
- Efficiency: MOTO payments can replace more clunky forms of payment processing like week-long invoices or delayed bank transfers for some industries. Take payment more quickly, especially if your customer needs to pre-pay for a good or service.
- Simplicity: Your payment terminal can accept payments from anywhere, so long as you have a machine with an internet connection. It’s also easy to set up on terminals like Smartpay.
- Fast payment: Once the customer’s bank authorises a payment with sufficient funds, you will receive the funds quickly. There is no need to wait for customers to transfer funds or risk losing out on sales if your customer doesn’t have another way to pay.
Examples of Common MOTO Transactions
MOTO payments are most common in businesses that take orders via email or by telephone, and ones that have a pre-payment, whether partially or in full. Examples include:
- Takeaway food services
- Health & fitness services
- Repair services
- Retail outlets
- Online retailers
- Travel agencies
Some scenarios where customers may request a MOTO payment include:
- If they are making a purchase over the phone or to online retailers. This is especially common if they need to pre-pay before receiving an item; take, for example, a catering order.
- If they cannot physically reach the store’s location in time to pay.
- If they are ordering from a remote location or requesting a service for their home.
How Do MOTO Transactions Work?
The first step of a MOTO payment is for a business to receive a customer’s card details. These details can include:
- Card number
- CVC/CVV
- Expiry date
- Name
- Address details
- Email (in some circumstances)
Once a merchant has this information, they simply enter the card information into their payment terminal. From there, the transaction proceeds like any other.
The customer’s bank will check if there are sufficient funds to authorise the payment. Once finalised, the merchant is notified about the payment. The funds are typically settled to the merchant’s bank within the normal settlement turnaround period.
How Much is the MOTO Transaction Fee?
Card processing fees are set by acquirers, meaning the institutions that facilitate the transaction and settle funds in the merchant’s account.
For Smartpay Low Cost Tap & Pay customers, your acquirer is us! With our consolidated fee structure, you don’t pay anything extra for MOTO payments. That means you could set up this payment option easily and have it processed like your other payments.
For Long Term Rental customers, your acquirer is likely your merchant bank, and they charge the agreed fee per transaction before they settle the funds in your account.
How to Make a MOTO Transaction with Smartpay
Smartpay makes MOTO and other transactions easy with our payment terminals. To accept MOTO payments on your Smartpay terminal, make sure you have MOTO payment functionality enabled. You can enable this function by talking to our experienced support staff or to Worldline (for Long Term Rental customers). Be sure to have your terminal ID at the ready for quick verification.
Once the functionality is engaged, you can take a MOTO transaction easily, just check out our guide here.
Are MOTO Payments Secure?
MOTO payments can present potential security risks as the card in use is not physically present.
Not having a physical card makes it difficult to verify that the card details belong to the person making the MOTO transaction. Fraud is often conducted through stolen card details or by faking personal information, including delivery addresses.
It is vital to your business and its security to keep an eye out for any potential red flags in your orders before you process them.
Another possible issue arising from MOTO payments is chargeback. If a cardholder disputes a transaction, the merchant is responsible for proving the purchase was made.
Without sufficient evidence, the merchant is liable for chargeback and will have to pay a full refund for the products or services that may have already been provided. To help protect your business, make sure you and your team are well aware of the risks of accepting MOTO payments.
Tips to Protect Your Business
To minimise any risks of fraud or chargeback, you should understand how to identify the following red flags:
- Orders being placed by someone other than the cardholder.
- Multiple orders being placed from the same card. This can be especially alarming if the orders increase in value.
- An email using a name belonging to someone different from the cardholder’s is used as a point of contact.
- A phone number being used as the only point of contact.
- Orders coming from the same delivery address across multiple cards, particularly when only the last 4 card digits are changed.
- The supposed cardholder can’t be contacted.
- Overseas orders, especially where there is no clear reason why someone from that country would buy from your business.
We always recommend checking that the billing and delivery address match to protect your business. Additionally, you can ask customers to provide photographic proof of the front and back of their card, as well as an image of their ID, to make sure the details match.
By taking these steps, you can reduce the risk of you or your customers experiencing fraud or chargebacks.
Should I Accept MOTO Payments?
Wondering whether MOTO payments are right for your business? Here are the questions you need to ask to come to the right conclusion:
- Will my business be more successful with this new payment process?
- Are MOTO payments expected in my industry?
- Do I need to set up a phone, website or alternate virtual terminal for my business?
- Can I guarantee both my business and customers’ details stay secure?
- Is my current EFTPOS setup capable of MOTO payments?
If reviewing these questions suggests yes, you can contact our 24/7 support team to get help on how to set up MOTO payments on your Smartpay terminal.
Why Smartpay is Right for Your Business
Incorporating MOTO transactions into your business is just one way Smartpay can offer you best-in-class payments. With our payment solutions, you get reliable services from an in-store payment provider with over two decades of experience. This means you will be joining over 40,000 businesses who trust us for their payment solutions.
Get in touch with one of our EFTPOS specialists today and discover how you can customise payments to your business!
