Short answer
A MOTO payment is a mail order or telephone order, where the merchant keys in card details given by the customer. The card is not present, so there is no chip, PIN or 3D Secure check. That is why MOTO usually needs separate approval, often costs more, and leaves most fraud risk with the merchant.
Part of How payments work. Start with the main guide: How a card payment works: authorisation, clearing and settlement
Key takeaways
- MOTO means mail order, telephone order. The merchant types in card details the customer reads out or writes down.
- It is a card-not-present channel with no chip, PIN or 3D Secure, so fraud and chargeback risk usually sits with the merchant.
- Providers often charge more for MOTO, and some add a monthly virtual terminal fee. Both show on the statement.
- The security code must never be stored after authorisation, and call recordings are a common way merchants break that rule.
- A merchant who never takes phone orders should usually have MOTO switched off.
A customer rings a business to order a part, a hamper or a table for ten. They read out a card number. The owner types it into a screen and the sale is done. That is a MOTO payment, and it is one of the oldest ways to take a card payment. It is also one of the riskiest, which is why providers treat it differently from a tap at the counter.
This guide explains what MOTO means, how a MOTO payment is taken, why it costs more and carries more risk, the security rules that apply, and how to see it on a merchant statement. It is written for payment consultants, so it ends with what to check when a merchant says "we only take a few phone orders".
What is a MOTO payment?
MOTO stands for mail order, telephone order. It is a payment where the customer gives their card details to the merchant by phone, post or in person on paper, and the merchant keys them in. The card itself is never read by a terminal, so it is a card-not-present payment.
The name dates from catalogue shopping, but the channel is alive today. Trades, restaurants taking bookings, charities, wholesalers and any business that invoices first and takes payment later all use it. The details are usually typed into a virtual terminal, which is a secure web page from the payment provider, or keyed on a physical card machine.
How is a MOTO payment taken?
A MOTO payment follows the same authorisation, clearing and settlement path as any card payment, as set out in how a card payment works. What differs is how the card details reach the system and what checks are possible.
- Customer gives detailsCard number, expiry date, name, billing address and the security code, by phone or in writing.
- Merchant keys them inInto a virtual terminal, a keyed entry on a card machine, or an automated phone system.
- Checks runThe provider can check the security code and the billing address against the issuer's records.
- Issuer decidesApproved or declined, usually within seconds, as with any card payment.
- Money settlesFunds reach the merchant's bank a day or more later, less fees.
The customer never taps or inserts a card, so every check relies on the details given.
There are three common ways to take MOTO payments.
- Virtual terminal. A web page from the provider where a staff member types the details. Many providers charge a monthly fee for it.
- Keyed entry on a card machine. Some terminals have a MOTO or "customer not present" option. It must be enabled on the merchant account.
- Automated phone payment. The customer types the digits on their own phone keypad, and the agent never hears or sees them. This keeps card data away from staff and recordings.
Why does MOTO need separate approval?
Providers usually switch MOTO off by default and turn it on after a check. The reason is risk. Without a chip, PIN or tap, nothing proves that the person on the phone holds the card.
When a provider enables MOTO it assesses the business: what it sells, how large the orders are, how long it has traded and how much of its turnover will come from keyed payments. A florist taking occasional phone orders is a different risk to a business selling electronics by phone to new customers. Some providers cap MOTO volume or set a lower limit per transaction.
This matters when a merchant moves provider. MOTO approval does not transfer. The new provider has to approve it again, and the merchant should ask early, because a missing MOTO facility can stop a business taking phone orders on day one.
Why does MOTO cost more?
MOTO is priced as a higher-risk channel, so the rate is often higher than for card-present payments. Two things drive that.
First, interchange. In several markets the interchange fee set by the card networks is higher for card-not-present payments than for chip or tap. Where regulation caps consumer card interchange, as it does for UK domestic consumer cards, the cap applies whether or not the card is present, so the gap may be smaller. See interchange fees explained and debit, credit and commercial card fees for how rates differ by card type.
Second, the provider's markup. Providers often add a higher markup for keyed payments because they carry more chargeback risk. Some add a monthly fee for the virtual terminal as well.
Illustrative rates for comparison, not quotes. A card-present rate, a keyed rate and a high keyed rate.
The gap is small on a few payments and large on many. A merchant taking £10,000 a month by phone at the higher rate pays £120 a month more than the card-present rate, which is £1,440 a year. That is why the MOTO share of turnover is worth checking before a quote.
Who carries the fraud risk on a MOTO payment?
Usually the merchant. MOTO payments sit outside the strong customer authentication rules that apply in the UK and Europe, and they cannot use 3D Secure, because the customer is not in a checkout where the bank can challenge them. That means the liability shift that protects merchants on a fully authenticated online payment does not apply. If a cardholder says they never made the purchase, the dispute is usually decided against the merchant. See 3D Secure explained for how the liability shift works online.
Providers and card networks differ on the details, so a merchant should confirm the position with their own provider. The practical point is the same: with MOTO, the business is relying on its own checks.
Ways to reduce risk include:
- Always collect the security code and the billing address, and make sure the provider checks both.
- Match the delivery address to the billing address for high-value orders, or hold the order until checked.
- Keep records. Note who took the order, the date, the amount and what was agreed.
- Respond to chargebacks quickly, with the order record and proof of delivery. See refunds, chargebacks and turnover.
What are the security and PCI rules?
The most important rule is simple: the card's security code must never be stored after the payment is authorised. That means not on paper, not in a spreadsheet, not in an email and not in a call recording. Card payment security rules set by the PCI Security Standards Council apply to anyone who handles card data, and they are stricter when staff type card numbers.
Call recording is the most common problem. Many businesses record calls for training or disputes. If a customer reads their card number and security code aloud during a recorded call, the recording now holds card data. Merchants have three main choices.
- Pause recording while card details are given. It is simple but depends on staff remembering every time.
- Use an automated phone payment where the customer types the digits and the tones are masked from the agent and the recording.
- Stop taking card details by phone and send the customer a payment link instead.
Merchants who handle MOTO often have a higher PCI compliance burden than those who only use a terminal that encrypts the card. Some providers charge a PCI fee that reflects this. See PCI compliance fees explained. Where card details are stored for repeat payments, a token should replace the card number, as explained in payment tokenisation explained.
How does MOTO appear on a merchant statement?
A MOTO payment may appear in several places, and the labels vary by provider. Look for these.
| What to look for | What it may be called | Why it matters |
|---|---|---|
| A separate rate or turnover line | MOTO, keyed, CNP, card not present, telephone order | A higher rate on part of the turnover |
| A monthly fee | Virtual terminal fee, gateway fee, MOTO fee | A fixed cost that applies in quiet months too |
| Per-transaction fees on keyed sales | Authorisation fee, CNP fee | Matters most for small orders |
| A PCI line | PCI compliance, PCI non-compliance | May be higher for merchants who key cards |
| Chargeback fees | Chargeback, retrieval or dispute fee | A cost that rises with fraud |
If the statement does not split keyed payments from card-present payments, the merchant may be paying one blended rate that hides the difference. See hidden fees on a merchant statement and monthly fees on a card machine bill for how to read the fixed lines.
What should a payment consultant check?
Use the statement to answer five questions before quoting.
- How much turnover is MOTO?Many statements show it as a separate line. If not, ask the merchant or the provider.
- What rate applies to it?Compare it with the card-present rate. A big gap changes the offer.
- Is there a virtual terminal fee?A monthly fee is easy to miss. Add it to the monthly cost.
- Is MOTO actually used?If not, ask whether it should be switched off to reduce risk and fees.
- Will the new provider approve it?MOTO approval does not transfer, so ask before the merchant switches.
A short routine for any merchant who mentions phone orders.
Enter the MOTO share and rate in the calculator so the comparison reflects what the merchant really pays. See how to read a merchant statement for the full method.
Is MOTO treated the same in every country?
The term MOTO is used in the UK, the US, Australia, New Zealand and South Africa, and the idea is the same everywhere: card details taken without the card present. What differs is the rules around it.
In the UK and Europe, the strong customer authentication rules exempt MOTO, which is why it cannot use 3D Secure. In the US, MOTO is a card-not-present channel that providers price and underwrite separately. In Australia, New Zealand and South Africa, the approach is set by the provider and the card networks. Check each provider's terms for approval, limits and pricing, because they vary.
Frequently asked questions
What does MOTO stand for?
MOTO stands for mail order, telephone order. It describes a payment where the customer gives card details by post or phone and the merchant types them in.
Is a MOTO payment the same as an online payment?
No. An online payment is made by the customer at a checkout and can use 3D Secure. A MOTO payment is keyed in by the merchant, so the bank cannot challenge the customer and the merchant carries more fraud risk.
Do I need a special account to take MOTO payments?
You need MOTO enabled on your merchant account. Providers usually approve it separately and may limit the amount. If you switch provider, ask for MOTO approval before you move.
Why does my provider charge more for MOTO?
Card-not-present payments carry more fraud and chargeback risk, so providers often charge a higher rate and sometimes a monthly virtual terminal fee. Compare the keyed rate with the card-present rate on your statement.
Can I record phone calls where customers give card details?
Only if the security code is never stored. Recording a customer reading out a card number and code breaks card security rules unless the recording is paused or the tones are masked. Automated phone payment or a payment link avoids the problem.
How can I take payments by phone without handling card numbers?
Send the customer a secure payment link by text or email, or use an automated phone payment where they type the digits on their keypad. Both keep card data away from staff.
Sources and further reading
Figures in this guide are examples to show the method. Fees, rules and rates change, so check your own statement, contract and current rules before you decide. This is general information, not financial or legal advice.