Phone, Fax, or Mail Order (MOTO) transactions are applicable for merchants who provide a venue for sales in which the customer pays for the purchase without being physically present at the location. The credit/debit card information is obtained by the merchant via phone, fax or mail. The merchant will not actually handle the card itself, and therefore will not swipe the card through a reader, but will manually enter the card information. These transactions may be referred to as “card not present” or “manually key-entered”. This type of sale is an alternative or addition to face-to -face sales, and is typically provided through retailers who employ catalog or telesales departments.
Card Not Present/ Manually Key-Entered Credit Card Transaction Process
- Customer presents credit/debit card number and supporting information via telephone, fax or mail to pay for purchase.
- Merchant is responsible for manually key-entering the credit/debit card and customer information, as well as security information (which includes expiration date and security code (CVV2) provided by the customer) and sale amount into the terminal. The merchant provides a receipt to the customer without a signature becasue the approval is obtained via voice (phone) or another document with signature (fax or mail order).
- Transaction information passes through a telephone line or internet connection to the Card Issuer to obtain approval. Approval is transmitted back to terminal, and merchant concludes sale. The approval/disapproval process between merchant and card issuer takes approximately 1-15 seconds depending upon the equipment/program and connection.
- At the end of the business day, the merchant wil settle or batch out the terminal. Most merchants can elect to have this process completed automatically (known as “auto close”) at a predetermined time each business day. Sale funding is routed to merchant’s bank typically within two business days*.
* Typically the merchant will receive the sale funding deposited into the specified checking account within two business days, though some exceptions may apply. Credit Card processing fees may be deducted daily or monthly depending on the type of account and merchant’s preference.
Security Recommendations for Card Not Present, Manually Entered Credit Card Processing
A “card not present” transaction is a less secure credit card transaction to process in that the merchant cannot confirm that the identity of the customer placing the order is the cardholder, the magnetic stripe or chip is not read by the terminal, and the customer is not able to authorize the transaction through their signature on the receipt. However, this method of transacting has been used successfully for many years, and is reasonably safe for both merchant and customer. However, to ensure the safest transactions, surest funding and lowest rates, merchants are advised to follow the recommendations below:
- Follow all prompts. Enter all inforamtion prompted by the terminal to the best of your ability.
- Ensure accuracy o the information entered. Ensure the correct information is obtained from the customer and entered accurately to increase the likelihood of approval and lowest rates. This includes the customer’s billing address for the credit card as it appears on their monthly statement.
- Ensure complete information is entered. Ensure that all information, to include the security code (CVV2) is entered to increase the likelihood of approval and lowest rates.
- Never accept a declined transaction. If the transaction is not approved, request an alternative form of payment, but do not allow the customer to close the sale with this method of payment.
- Maintain the security of the customer’s credit card numbers. Ensure the credit card number is truncated (revealing only the last four digits) and the expiration date is not printing on the receipts.
- Refund errors before batching out if possible.
- Maintain signed receipts in chronological order, securely.
- Ensure the terminal is batched out at day close.
- Make a clear disclosure to your customer as to when they can expect the purchased product. You can charge your customer prior to shipping the product or when the product ships. The authorization is only valid for 30 days.