It is possible for a contractor to complete a repair on a customer after they have returned to work. A retailer may receive an order over the phone, and an accounting firm may have to gather the invoice for a customer before beginning the next project. In each instance, the customer is ready to pay but is not present at the point-of-sale terminal.
A MOTO merchant account allows businesses to accept payments from customers who arrange to purchase products or services over the phone or mail order. These purchases can be authorized through the secure virtual terminal that is licensed to the business. The virtual terminal allows an employee to enter the customer payment details through a browser and issue a receipt to the customer.
What Is Virtual POS & MOTO Payment Processing?
MOTO stands for mail order and telephone order. MOTO transactions occur when a customer provides payment information for an order without physically presenting their card. That order can then be processed through a virtual terminal.
A virtual terminal is the interface through which a merchant processes the MOTO transaction. The merchant employee will log in to the virtual terminal software (like Authorize.net and NMI’s virtual terminals) to enter the details of the sale and the payment information for that sale. After clicking submit, the software will authorize the sale and record that authorization.
The term virtual POS is often used to describe the same functions as a virtual terminal. However, some companies use the term in another way. For instance, Authorize.net uses the term Virtual Terminal to describe their software for manually entering payments, but they also offer a Virtual Point-of-Sale software that connects a card reader to a computer.
When MOTO Payment Processing Makes Sense
MOTO payments are best used in situations where the initial sale of a product or service occurs outside of the merchant’s physical location. This includes sales of special orders, replacement parts, and catalog sales from retail establishments, as well as service sales like deposits, invoices, and appointment fees from service businesses.
Common users of MOTO include:
- contractors
- professional services companies
- wholesalers
- medical and dental clinics
- travel and hospitality industries
- automotive repair shops
- insurance agencies
- property management companies
- restaurants that take large catering orders
- retail stores that receive orders over the phone or catalog
Remote card payments should be disclosed during the underwriting process for the merchant account. A merchant approved for in-person transactions only may cause problems for their account if they process a significant portion of manually entered sales using the MOTO option.
Comparing MOTO, Payment Links & Online Invoices
Not every remote transaction needs to be entered by an employee. A payment link or payable invoice may be a better choice when the customer can complete checkout independently.
| Remote Payment Method | How It Works | Best Fit | Main Tradeoff |
|---|---|---|---|
| MOTO virtual terminal | Employee enters card information provided by phone or mail | Immediate, staff-assisted collection | Greater fraud exposure and PCI responsibility |
| Payment link | Customer opens a secure page and enters payment details | Text, email and follow-up payments | Customer must complete an additional step |
| Payable invoice | Customer pays from an invoice or billing portal | Professional services and account balances | Payment may not occur during the original call |
| Card on file | Merchant charges a previously stored token with authorization | Repeat customers and recurring services | Requires clear consent and stored-credential controls |
| ACH or eCheck | Customer pays from a bank account | Larger invoices and recurring B2B payments | Authorization, returns and settlement differ from cards |
| Mobile reader | Employee accepts the card at the customer’s location | Field service and delivery | Requires the customer and card to be present |
A customer-entered payment link is generally treated as an ecommerce transaction rather than MOTO because the merchant does not manually enter the card details. Businesses can reduce unnecessary card handling by using payment links when immediate employee-assisted entry is not required.
How MOTO Credit Card Processing Works
When processing a payment using the MOTO method, a business must first receive the customer’s order or invoice. Once the employee has gathered the customer’s order information, they can open the virtual terminal.
Processing a MOTO transaction involves the following steps
- Create or locate the customer order or invoice
- Confirm the order amount and terms
- Collect the customer’s card details
- Enter the order and customer information into the virtual terminal
- Request the customer’s address and card verification details
- Submit the transaction
- Note the transaction ID with the customer order
- Send the customer a receipt
- Remove temporary order notes with card details
- Reconcile the transaction details with the daily deposit
Authorization means that the customer’s bank approved the transaction at the time of authorization. It does not mean that the customer will not be able to receive a refund of that transaction. The business should retain the customer receipt, order, authorization, and fulfillment details of the transaction.
Reduce MOTO Fraud & Chargeback Risk
Since MOTO transactions are card-not-present, merchants cannot rely on chip data or contactless cards to verify the purchaser’s identity. According to data released by the Federal Reserve in 2026, card-not-present transactions accounted for 34.4% of all debit card transactions and nearly half of all transaction values processed in the year 2023.
Some of the controls that can help to prevent MOTO fraud include:
- address verification
- CVV verification
- customer callback
- transaction limits
- employee limits
- recognizable billing descriptors
- written order
- manual review for amounts that appear unusual
- device monitoring
- account access monitoring
- delivery monitoring
- receipt monitoring
- customer support
A successful response to a CVV number does not indicate that the caller is the legitimate cardholder for the account. The CVV number is one of many factors that should be considered in verifying the identity of the caller.
Finally, merchants should be aware of declines from card issuers. Submitting the same card that receives a declined response from an issuer may lead to increased fraud issues for that merchant and may violate the terms of Mastercard’s policy regarding additional authorizations for a declined transaction.
Protect Card Data During Phone Orders
The Payment Card Industry Data Security Standard (PCI DSS) applies to all entities that store, process, or transmit payment account data. While a virtual terminal may allow a business to eliminate the need for custom payment software, the employees will be required to enter payment data for each transaction.
Businesses should prohibit their staff from writing card data into the following:
- text messages
- customer relationship management (CRM) software
- spreadsheets
- paper notebooks
- telephone call transcripts
- messaging platforms other than the telephone
- service tickets
- memo fields within accounting software
While card-verification codes may be collected during the transaction for which the customer authorizes the transaction, the PCI Security Standards Council (PCI SSC) states that these codes cannot be retained by the merchant after the transaction is authorized. This rule applies even if the customer provides the merchant with permission to retain the code.
Businesses that record telephone conversations with their customers should ensure that payment data is not recorded during those conversations. Any business that utilizes telephone recording software should utilize technology that automatically blanks or removes any payment-related information from the recording. Businesses should ensure that their merchant account holder or accredited practitioner is aware of the necessary steps to validate the PCI DSS during phone conversations with customers.
MOTO Merchant Account Pricing & Underwriting
Because MOTO payments lack the chip and contactless data required to authorize the transactions, there is typically an increased risk of fraud associated with these types of transactions. As a result, the cost of processing them is typically higher than card-present transactions. The various factors that contribute to the total cost of these transactions include interchange fees, card network fees, processor fees, per-transaction fees, gateway fees, and monthly virtual-terminal fees.
In addition to assessing the cost of each of these elements individually, many providers will also take a closer look at several factors related to the business making the sales:
- percentage of sales made remotely
- average and maximum ticket for sales
- monthly card volume
- types of products and services that are sold
- locations of the customers
- timing of the fulfillment of orders
- policies regarding refunds and cancellations of orders
- processing statements for the past few months
- rate of fraud and chargebacks for sales
- sales that use recurring payment methods
- access controls for employees to the sales platform
If a business receives a dedicated MOTO merchant account, it is likely that at least some of the sales made by that business are either phone or mail orders. While some conventional merchant accounts may accept occasional keyed transactions only, frequent keyed transactions will likely require that the merchant account be of the same type as the business that will be utilizing it.
Square offers a virtual terminal that can be accessed through the browser for its merchant accounts and offers pricing for manually entered remote transactions. This option is suitable for businesses with a lower risk of fraud and that offer different products to their customers. However, merchants in any specialized industry will need to confirm whether their industry is eligible to use this platform.
How Visa VAMP Affects MOTO Merchants
VAMP combines the number of fraud and non-fraud disputes that Visa receives for card-not-present transactions. TC40 refers to the number of fraud reports that Visa collects for card-not-present transactions. TC15 refers to the number of disputes for card-not-present transactions.
MOTO transactions will contribute to the number of card-not-present transactions for a merchant. Therefore, fraud, disputes, and the required refunds for virtual terminal sales should be monitored separately from in-person sales.
Enumeration attacks are generally associated with automated testing of credit cards on online forms. However, the credentials for virtual terminal sales can be compromised. Using strong passwords, implementing multifactor authentication, managing sales employees’ permissions, and monitoring employee login activity are all essential elements for protecting virtual terminal sales from unauthorized employee compromise.
Visa has established thresholds for VAMP that most small merchants will not meet. These thresholds require a minimum number of transactions and fraud and disputes. The acquiring banks and payment processors for a merchant can implement fraud and dispute limits that are more stringent than those established by Visa.
Common MOTO Payment Processing Mistakes to Avoid
The biggest mistake with virtual terminals is treating it like a shared office form. Each employee should have their own login so that the business can track which employee entered, refunded, and voided payments.
Other common mistakes include:
- Using one shared account for all employees
- Writing the card details on paper
- Storing the CVV codes
- Making a payment without a sales order or invoice
- Ignoring address discrepancies
- Keying in the details of a card that is physically present
- Making repeated one-time payments for declined cards
- Accepting orders for large amounts of money
- Forgetting to email receipts after sales
- Hiding MOTO sales during underwriting
- Using unclear billing descriptors
- Allowing employee accounts to remain active after the employee leaves the company
Having a documented process for collecting payments with a virtual terminal will ensure that your employees can collect payments from your customers and that you have a record of those sales.
Essential Features of a MOTO Merchant Account
A Secure Virtual Terminal
The virtual-terminal software should use encrypted access from a merchant’s browser, as well as provide each employee with a unique set of login credentials. Each employee should be able to process approved transaction types only.
Order and Invoice Fields
Each virtual terminal should have fields for recording information about the order, such as the invoice number, the customer identifier, and the product/service description. NMI and Authorize.net allow merchants to customize their virtual-terminal software form fields. Authorize.net’s merchant interface also includes tools to manage transactions and batches of transactions.
Authorization, Capture and Refund Controls
Some merchants require authorizations and captured payments to manage their inventory. Other merchants may manage their sales only and require voids and refunds functionality. Each employee should have permissions according to their role in the business. A customer service representative may be able to take payments, but not have access to issuing refunds or viewing sales reports for the business.
Card-on-File and Recurring Billing
For merchants who have a subset of customers who make repeat purchases, having a tokenized card on file with the merchant service provider reduces the amount of information that must be entered into their systems for future purchases.
Reporting and Reconciliation
Remote transactions should appear in the same reporting environment as the business’s other approved payment channels. Reports should identify the employee, customer, invoice, transaction type, result, refund activity and settlement batch. Connected reporting matters when a business also accepts cards in person, online or in the field. Without it, staff may have to compare several dashboards before determining whether an invoice was paid.
Payment Links and ACH
Depending upon the merchant service provider, a strong remote payment solution does not require that every customer use the MOTO program. Some programs allow the merchant to send secure payment links to their customers, or allow for ACH transactions between merchants and customers for larger invoices. Payment Nerds places its MOTO program around the ability for customers to order products over the phone, renew their subscription plans, and to be able to enter purchases through virtual terminals, secure links and tools within the merchant account with eligible business owners. Merchant account terms and program availability will be subject to underwriting and qualification requirements.
FAQs
Q: What is a MOTO merchant account?
A: A MOTO merchant account is underwritten for mail order and telephone order card transactions only. These accounts usually come with a virtual terminal to accept remote card payments from employees.
Q: What is MOTO payment processing?
A: MOTO payments are processed when the customer provides the payment details over the phone or in mail. The merchant manually enters the card details into the merchant’s system.
Q: What is MOTO credit card processing used for?
A: MOTO card processing is used for placing orders over the phone, making deposits, settling invoice balances, catalog sales and more. Many retailers, contractors and professional service companies use MOTO processing.
Q: Is a virtual terminal the same as a POS system?
A: A virtual terminal and a POS system are two different technologies. A virtual terminal allows for manual entry of payments over the web. A POS system is for in person sales only. However, many virtual terminals connect to a POS system.
Q: Is a payment link considered MOTO?
A: No, not if the customer is using the link to enter their payment information. This is ecommerce, not MOTO.
Q: Can employees write down the credit card details during the phone call?
A: No. The business should enter the credit card details into the virtual terminal instead. Writing down card details is discouraged and jeopardizes the security of the transaction. The customer’s security code should never be written down.
Q: Are MOTO payments more expensive?
A: Usually yes. MOTO payments are typically more expensive than chip and contactless payments because the data is manually entered into the system. However, the actual cost will differ from business to business.
Q: Can a high-risk business use a virtual terminal?
A: Yes. The high-risk business will simply have to convince the bank and the payment processor to accept their credit card and high-risk MOTO transactions.
Q: How can a business reduce MOTO chargebacks?
A: By ensuring that they have the customer and billing information correct. Using the correct descriptors for the products. Retaining records of the orders. Sending receipts. Documenting the deliveries or the services performed, cancellations and any refunds.
Improve Your MOTO Payment Workflow
A virtual terminal lets merchants take payments when the customer and the card reader are not physically present with the business. By connecting virtual terminals to sales records and limiting access to the payment and refund functions, merchants maintain data security.
Rather than relying on one method for taking payments when a customer is remote from the business, evaluating options such as MOTO payment processing, payment links, ACH payments, and mobile card readers can create the best payment solution for the business.
Sources
- Board of Governors of the Federal Reserve System. “2023 Interchange Fee Revenue, Covered Issuer Costs and Covered Issuer and Merchant Fraud Losses.” Accessed July 2026.
- Authorize.net. “Accept Phone Payments Easily.” Accessed July 2026.
- NMI. “Credit Card Processing Virtual Terminal Guide.” Accessed July 2026.
- PCI Security Standards Council. “Merchant Resources.” Accessed July 2026.
- PCI Security Standards Council. “Can Card Verification Codes Be Stored?” Accessed July 2026.
- Visa. “Dispute Management Guidelines for Visa Merchants.” Accessed July 2026.
- Mastercard. “Transaction Processing Rules.” Accessed July 2026.
- Square. “Virtual Terminal Credit Card Processing.” Accessed July 2026.
