What Are MOTO Payments and How Do They Work?

If you’re a small business owner, you likely have some passing resemblance with MOTO payments. These payments have been around for a while, and their original purpose was to serve as an alternative payment method for people who were unable to visit the physical store. Despite the rise in online shopping, MOTO payments remain in use today.

Can your business make use of MOTO payments? Find out below by getting acquainted with how these payments work, as well as their advantages and disadvantages!

How MOTO Payments Work

MOTO is shorthand for Mail Order / Telephone Order. It’s a type of credit card transaction where customers give their payment details through mail or phone. MOTO payment processing is most commonly used by businesses that don’t have a physical store, like e-commerce businesses.

Processing MOTO payments is simple. After receiving the payment details, the merchant enters them into a payment gateway or virtual terminal. At this point, the transaction is processed like all other credit card transactions. MOTO payments are a solid choice for merchants who want to offer more payment options to customers or expand their customer base beyond the local area.

Advantages of MOTO Payments

The biggest advantage of MOTO payments is convenience. Some customers want the convenience of making purchases from their home or office without having to deal with risks associated with online payments. Thanks to the flexibility MOTO transactions provide over traditional payment methods, they can be a great fit for this type of customer.

MOTO payments also add an element of professionalism to your business. Processing transactions via a virtual terminal means your customers will get a professional notification about it, giving your business an air of authority.

Finally, MOTO payments allow you to save customers’ payment details for next time. This sort of convenience allows you to provide both recurring payments and single transactions to your customers. This is perfect for businesses offering subscription-based services.

Disadvantages of MOTO Payments

Though MOTO payments offer a variety of advantages, they also come with some unique drawbacks. For example, having to enter the customer’s credit card information manually involves a higher risk of human error. On top of that, since the transaction isn’t conducted in person, there’s a naturally higher risk of fraud or chargebacks.

To avoid these issues, merchants that use MOTO payments would be wise to ensure that each transaction is legitimate. You can do that by verifying the customer’s identity, such as asking for their billing address or the CVV code on the back of their credit card.

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