Mail Order Phone Order - MOTO Merchant Accounts
If you run a mail order business and/or take credit card payments over the telephone, you are participating in, what we call in the industry, MOTO Credit Card Processing. (MOTO = Mail Order Telephone Order). Essentially, this means that you collect credit cards in an environment where the customer and credit card are not physically present at the time of purchase. Another term used for this is card not present credit card processing.
The model below describes how MOTO credit card processing works - step by step.
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The customer calls or mails in an order to the merchant and provides their credit card information. The merchant enters the card information and sale amount it into a credit card terminal, PC software or payment gateway.
- The processing system connects to First Data processor for authorization.
- The processor passes the sale information on to the bank that issued the credit card which checks to see that the card is valid and if the amount requested is available on the account.
- The issuing bank sends an approval number or a decline message back to the processor.
- The information is passed back to the processing system which gives the merchant the approval number and allows them to print a receipt for their records. It takes approximately 3-15 seconds to complete steps 2-5 on a traditional terminal or just a few seconds with a terminal or software connected to the internet.
- The merchant must "settle" their processing sales on a daily basis which begins the final process in the transactions. In most cases the credit card machines can be programmed to settle the account at a specified time each day. The sales proceeds are then transferred from the card issuing bank and are electronically deposits into the merchant's checking account. It typically takes two business days from the time of the original transaction for the funds to reach the merchant's checking account
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