In the world of digital transactions, every business looks out for secure and efficient ways of processing payments. One such method, especially in remote transactions, is a MOTO payment. In this post, we’ll talk about what a MOTO payment is and how it works, so you can make an informed decision.
What Are MOTO Payments?
MOTO payments happen when customers share their payment card details with businesses over the phone or through mail, instead of in person or online. MOTO stands for “mail order/telephone order.” Businesses use these payments when they can’t physically swipe or insert the customer’s card. Although more common before e-commerce, some businesses still rely on MOTO payments today.
In this process, the customer gives their card details, and the business enters this information into a payment system to finish the transaction. To ensure the payment is secure and legitimate, businesses need to follow specific steps.
While digital payments are more popular now, a study by the Federal Reserve found that 2.6 billion MOTO payments occurred in the United States in 2020. Any business that takes orders by mail or phone – or is thinking about adding these options – should know how to handle MOTO payments safely and effectively.
To learn more about the specifics of how these transactions work, you can explore MOTO payments in detail.
How MOTO Payments Work
MOTO payments allow businesses to process credit or debit card transactions without the card being physically present. Here’s how it works:
A customer decides to make a purchase over the phone or by mail. They provide their card details, including the number, expiry date, and sometimes the CVV code. The business manually enters this information into a payment terminal or a virtual terminal online. For phone orders, some businesses use an IVR system where customers enter their card details via the phone keypad, which adds security.
The payment processor then communicates with the card network and the issuing bank to check the card’s validity, ensure there are enough funds, and apply anti-fraud measures. After the transaction is authorized, it’s queued for settlement, but funds aren’t transferred until the end of the business day when the business sends all transactions for settlement. The funds are then moved from the bank to the merchant account, minus any processing fees.
MOTO payments can also involve other methods, like paper checks, bank transfers, or cash on delivery. It’s crucial to keep detailed records of these transactions, including the date, amount, and description of goods or services, for any future disputes.
Benefits of MOTO Payments
Several benefits are associated with MOTO payments for both the business and the customer. These advantages include:
- Convenience: MOTO payments allow customers to effectively make a purchase without physically being there to complete it or going through an online payment gateway. This is particularly useful for elderly customers or those who like to use more traditional methods of making a payment.
- Greater Reach of Customers: Firms will now be able to serve persons who do not have access to the internet or those who simply do not prefer online payment systems, thereby increasing their base of potential customers, hence increasing sales.
- Flexibility: MOTO payment will present the business with flexibility, especially where the collection of payments is concerned and regardless of the timing and location of the customer. This comes in handy when doing businesses with great coverage areas, either countrywide or internationally.
- Personalized Service: More personalized service with customers, in particular in sectors such as travel agents or retailers of luxury goods, is possible with MOTO payments. In the process, customer satisfaction and customer loyalty are achieved.
- No Need for Physical Terminals: A business that operates primarily through phone orders or even by mail does not require investing in a physical card terminal, hence cutting down all the overhead costs which would have been associated.
Security Considerations
Although MOTO payments have several benefits, it also has some risks associated with it, mainly related to security. Since MOTO payment is considered a card-not-present transaction, it may easily be committed to fraud compared to face-to-face payment. The following are the security attempts followed by a business in order to protect this risk:
- CVV Codes: CVV codes should be used to require a customer to provide a three-digit code located at the back of the card to make sure an individual conducting a transaction physically has the card at hand.
- AVS: Use the Address Verification Service to ensure the billing address the customer provides is close to the one the card issuer has in their files. This helps reduce the incidence of fraud.
- PCI Compliance: This dictates that any business that accepts MOTO payments must adhere to the Payment Card Industry Data Security Standard, a code outlining that cardholder data should always be processed, stored, and transmitted securely to reduce any opportunity of a potential data breach.
- Tokenization: This is replacing sensitive card information with a unique identifier or “token,” used in processing the payment, in place of the actual details. This action secures the details of customers during and after the transaction.
- Regular Monitoring and Audits: Businesses have to go through their payment systems at intervals to detect any fraudulent actions and perform audits in order to assure that security standards are not violated.
The Role of Paytower in MOTO Payments
Being one of the major payment solution providers, Paytower takes a very important place in allowing businesses to process secure and efficient MOTO payments. Paytower provides solutions that will help the business in running its payment processes by offering robust security features, integration into any previously existing system, and dedicated customer support.
Paytower realizes the challenges in processing MOTO payments and offers tools to businesses looking to be successful. From volumes of high transactions to compliance with several industry regulations, Paytower stands as a strategic partner in successfully streamlining its clients’ payment operations.
Conclusion
MOTO payments fill an important gap for businesses looking to accept card-not-present transactions from their customers. The understanding of how MOTO payments work, the benefits associated with using them, and the security measures put in place to protect both business and customer shall give a company the assurance it needs to use this kind of payment method.
With the aid of a reliable payment processor like Paytower, all MOTO payment operations will be on the enterprise system’s part: no hassle and secure for a smooth customer experience. Be it travel agencies, storefronts, or any kind of business involving remote transactions, MOTO will definitely take you further with optimum service to customers.
