Mail Order/Telephone Order (MOTO) transactions refer to card-not-present payments where a customer provides their credit card information over the phone, through the mail, or via fax for a business to process the payment manually. While MOTO has its roots in catalog shopping and telephone sales, in 2026 it remains a relevant payment method for specific industries and business models that serve customers remotely without a traditional e-commerce storefront. Understanding how MOTO processing works, its costs, and its risks is important for any business that accepts payments without the customer’s card physically present.
How MOTO Transactions Work
In a MOTO transaction, the customer communicates their card details—card number, expiration date, CVV code, and billing address—to the merchant, who then manually enters this information into a payment terminal or virtual terminal to process the charge. Unlike in-person transactions where the card is physically read by a chip reader or contactless terminal, MOTO transactions rely on the merchant keying in the data, which classifies them as card-not-present (CNP) transactions under card network rules.
Most payment processors provide virtual terminal access as part of their merchant account services, allowing businesses to enter card information through a secure web-based interface. Some businesses use dedicated MOTO-enabled terminals that connect to their processing account. In 2026, many processors also offer integrated solutions that combine virtual terminal functionality with invoicing, recurring billing, and customer management features.
Industries That Benefit from MOTO Processing
MOTO processing remains particularly valuable for businesses where customers prefer or need to place orders by phone. This includes home services companies (plumbers, electricians, HVAC), medical and dental offices that collect payments over the phone, insurance agencies, legal firms, B2B companies that take orders from established clients, and nonprofit organizations that accept donations by phone. Businesses that serve older demographics or customers who may not be comfortable with online payment also benefit from maintaining MOTO capabilities.
While e-commerce has absorbed much of what was once MOTO territory, there are legitimate business scenarios where phone or mail orders remain the most practical payment method. For example, a contractor providing an estimate over the phone who can collect a deposit immediately through a virtual terminal, or a specialty retailer serving repeat wholesale clients who prefer to call in orders rather than use an online portal.
Costs and Fees for MOTO Transactions
MOTO transactions carry higher processing fees than card-present transactions because they are classified as card-not-present, which the card networks consider higher risk for fraud. Under interchange-plus pricing, MOTO transactions are assessed at card-not-present interchange rates, which are typically 0.30% to 0.80% higher than card-present rates. Under tiered pricing, MOTO transactions are often classified as mid-qualified or non-qualified, resulting in even higher effective rates.
To minimize costs, businesses that process MOTO transactions should ensure they collect complete transaction data including the CVV code and full billing address for address verification (AVS). Providing this data can help qualify transactions for lower interchange rate categories. Settling batches promptly and using an interchange-plus pricing model will also help keep MOTO processing costs as low as possible.
Security and Fraud Prevention
Because the card is not physically present during a MOTO transaction, businesses face a higher risk of fraud and chargebacks. In 2026, businesses processing MOTO payments should implement robust security measures including always collecting the CVV code, using address verification (AVS), maintaining detailed records of customer authorization, and following PCI DSS compliance standards for handling and storing cardholder data. Never store full card numbers in unsecured locations such as paper files, spreadsheets, or email.
For businesses with recurring MOTO customers, tokenization allows the processor to store card details securely and reference them with a token for future transactions, eliminating the need to re-collect and re-enter card information. This not only improves security but also streamlines the payment process for repeat customers while keeping the business in compliance with data protection requirements.