What is a MOTO Merchant Account?
A MOTO merchant account—short for Mail Order / Telephone Order—lets businesses key in credit-card payments they receive by phone, mail, or fax rather than through an online checkout or in-person terminal. Because every sale is “card-not-present,” processors price these accounts slightly higher and require stronger fraud controls, such as AVS, CVV, and detailed order notes. MOTO accounts suit call centers, catalog retailers, nonprofits, and small service firms that collect payments remotely without a full e-commerce site.
Key Takeaways
- A MOTO merchant account lets you manually key in credit-card payments received by phone or mail, giving catalog retailers, call centers, and other remote sellers a way to accept card-not-present orders.
- Because neither the card nor the customer is on site, fraud and chargebacks rise; processors therefore classify MOTO as high-risk, price it higher, and require safeguards such as AVS, CVV, and full PCI compliance.
- Lower your exposure—and ultimately your rates—by using secure virtual terminals, real-time transaction monitoring, multi-factor authentication, and meticulous record-keeping to prove strong fraud controls.
Table of Contents
Why are MOTO Merchant Accounts Considered High Risk?
MOTO (Mail Order/Telephone Order) merchant accounts are labeled high-risk because every payment is “card-not-present,” leaving no way to verify the cardholder face-to-face. That gap invites stolen-card use, drives up fraud and chargebacks, and forces processors to shoulder reimbursement costs when disputes arise. To mitigate the exposure, providers charge higher fees and demand stricter vetting.
Key Risk Factors:
Card-not-present exposure: No physical card or chip-and-PIN check means weaker identity proof.
Elevated fraud potential: Stolen numbers can be keyed in easily by phone, mail, or fax.
Higher chargeback rates: Customers more often dispute unfamiliar or delayed orders.
Shipping and fulfillment issues: Delays, loss, or damage spark refund claims.
Strict PCI compliance: Extra data-security steps are mandatory to avoid breaches and fines.
How To Combat Fraud in MOTO Payment Processing?
Combating fraud with a MOTO Merchant Account requires implementing a combination of security measures and best practices. Here are some of the most effective strategies:
1. Implement AVS (Address Verification System)
What: Matches the buyer’s billing address to the bank’s record.
Why: Flags address mismatches, cutting unauthorized CNP chargebacks.
2. Use CVV Verification
What: Collects the 3- or 4-digit security code on the card.
Why: CVV isn’t stored, so thieves usually lack it—blocking many fraud attempts.
3. Monitor and Analyze Transactions
- What It Is: Regularly monitor transactions for unusual patterns or behaviors, such as multiple transactions from the same IP address, a sudden increase in transaction volume, or orders from high-risk regions.
- Why It Works: Early detection of suspicious activity allows you to take immediate action, such as flagging or declining transactions, to prevent potential fraud.
4. Use Secure Virtual Terminals
- What It Is: A virtual terminal is a web-based payment processing system that allows merchants to manually enter payment information for MOTO transactions.
- Why It Works: Secure virtual terminals include encryption and tokenization, protecting sensitive payment data from being intercepted or compromised.
5. Require Strong Authentication
- What It Is: Implementing multi-factor authentication (MFA) for customers can add an additional layer of security. This could involve sending a one-time password (OTP) to the customer’s phone or email to verify their identity before completing the transaction.
- Why It Works: MFA makes it significantly harder for fraudsters to complete unauthorized transactions, even if they have the customer’s credit card information.
6. Establish Clear Return and Refund Policies
- What It Is: Clearly communicate your return and refund policies to customers at the point of sale. Ensure that these policies are easy to understand and accessible on your website.
- Why It Works: Clear policies can reduce misunderstandings and potential chargebacks by setting proper expectations for customers.
Benefits Of A Durango Telephone Order or Mail Order Merchant Account:
If you get a MOTO merchant account with Durango Merchant Services, then you will also be eligible for other benefits that we offer, we can set you up with electronic commerce and recurring billing via our online portal. Businesses can receive the following additional benefits:
- PCI-Compliant Virtual Terminals: We equip you with virtual terminals that feature state-of-the-art security technology.
- Wide Payment Acceptance: Accept all major credit and debit cards, plus eChecks and ACH transfers.
- Enhanced Data Processing: For B2B transactions, our Level 2 and 3 data processing capabilities help lower your rates when you accept commercial credit cards, including p-cards.
- High Ticket Processing: Handle large transactions with our high ticket processing program.
- Advanced Online Reporting: Get detailed insights into your business’s performance with our online reporting tools.
- Automated Solutions: Streamline your operations with automated invoicing and recurring billing plans.
- Chargeback Prevention & Support: We provide chargeback prevention tools and a dedicated team to guide you through implementing basic safeguards.
- Advanced Fraud Protection: Customize fraud filters and set thresholds to flag and hold suspicious orders before they’re authorized.
- User-Friendly Merchant Dashboard: Easily search transaction history, manage customer data, issue refunds, and more, all from a centralized dashboard.
- Multi-Currency Capable Gateway: Our gateway supports multiple currencies, enabling your business to cater to international customers with ease.
How to Open a MOTO (Mail Order / Telephone Order) Merchant Account
Step-by-step instructions for businesses that need to accept card-not-present payments by phone, mail, or fax.
Things Needed?
Steps To Open A MOTO Merchant Account
Our dedicated team negotiates on behalf of thousands of clients. We understand the back and forth and give and take of negotiating processing accounts for high risk merchants.
