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Take Payments Over The Phone? Check Out These 6 Great MOTO Credit Card Processors

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Think carefully. When was the last time you ordered anything by mail where you had to fill out your credit card information by hand, writing one number into each little box in that long string of tiny boxes? Very likely, it was a long time ago. What about paying for an order with a card over the telephone? That might be surprisingly recent.

While mail-order businesses have probably evolved into online stores, telephone orders continue to be quite robust. In fact, ever since the COVID-19 crisis, you’ve probably paid by telephone a lot more than before, whether it’s to order takeout, buy through curbside pickup (grocery stores or retail stores), doctor’s visit, veterinarian’s visit, and maybe even the services of a lawyer or an accountant. What was old is suddenly new again.

So putting on your merchant hat, you probably want to learn a little more about credit card processing related to mail orders/telephone orders (MOTO). More importantly, if you’re already using MOTO transactions for your business, you may have noticed that you’re paying a little more for each sale. You might be wondering if you can lower this cost.

If so, then you’re reading the right article. Below, we’ll recommend six processors that provide excellent value for MOTO transactions that fit various types of businesses. We’ll also answer some common questions related to MOTO transactions. Read on to learn more.

Learn More About Our Top Picks

CompanyBest ForNext Steps
PaymentCloud
Best for high-risk businesses.

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Fattmerchant
Best for high-volume merchants.

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Dharma Merchant Services
Best for merchants who process more than $10,000/month.

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Read More

Square
Best for businesses that are seasonal or process less than $10,000/month.

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Read More

National Processing
Best for an all-around processor.

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Read More

Other Featured Options:

Read more below to learn why we chose these options.

The Best MOTO Merchant Accounts

Below are six of what we consider the best MOTO credit card processors, each chosen because they’re the best at doing what they do in a specific area. Please note that these merchants are not listed in any order of preference. Read on to learn more.

 

1. PaymentCloud

PaymentCloud



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If your business is in a high-risk industry and you take MOTO payments, we recommend you take a look at Payment Cloud. MOTO sales, because they’re classified as card-not-present sales, are inherently more prone to fraud and, therefore, riskier for the banks underwriting each transaction. Add to the fact that your business’s industry is already considered high-risk, and you’re very likely going to have a hard time finding a merchant account provider.

Fortunately, PaymentCloud takes an extremely hands-on approach during the initial application and underwriting process. The company works with a number of acquirers to find the ones willing to take the risk of working in your industry and pick from those to get you the best deal possible. Afterward, you receive intensive follow-up support, and the company advocates for you if you have issues with the acquirer. In fact, PaymentCloud is so good at this that the “normal risk” processors such as Stripe and Dharma Merchant Services recommend it for merchants they cannot place themselves.

PaymentCloud currently provides no pricing information on its website. Ordinarily, we don’t like this practice, but it is common among high-risk merchant account providers. High-risk processing rates are exceedingly variable and will differ from one merchant to the next, so it is impractical to disclose any numbers publicly.

If you’re interested in PaymentCloud, take a look at our detailed review. Note that while it’s primarily a high-risk processor, the company does take regular-risk merchants as well. Despite PaymentCloud not disclosing rate information, we’ve been able to get some preliminary numbers from them to serve as a starting point of your negotiations. You can find these numbers in the full review.

Pros

  • High-risk specialist
  • No account setup fee
  • Reasonable rates and fees
  • No monthly minimum for low-risk merchants
  • Excellent customer support
  • Few public complaints

Cons

  • No publicly disclosed pricing

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2. Fattmerchant

Fattmerchant



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If your business is year-round (as opposed to seasonal), you might want to check out Fattmerchant as a possibility for your processing needs. Fattmerchant is one of a few providers in the industry to offer membership (also called subscription-based) pricing, which eliminates the percentage markup over interchange in exchange for a higher monthly subscription fee. Account fees are also consolidated into a single monthly fee, making your costs more stable and predictable.

Fattmerchant has two membership levels: one for merchants with transaction volumes less than $500K per year (at $99 per month) and one for those with more than $500K per year (at $199 per month). In addition to this membership fee, you pay a standard per-transaction fee of $0.15 or $o.12 per transaction for MOTO payments. This pricing structure means that the more you process, the less you pay in terms of the percentage of your overall card payment volume. If your business processes at the higher end of each tier, then Fattmerchant is definitely worth considering.

Unfortunately for MOTO merchants, Fattmerchant offers many of its core services (terminals, virtual terminal, mobile POS, shopping cart, integrations, and API) à la carte instead of for free as part of an all-in-one platform like a lot of other processors. MOTO transactions are done through a virtual terminal, so it isn’t an optional fee for you. If you want to use a Fattmerchant terminal for in-person payment processing as well as the virtual terminal for invoicing and manual entry of transactions, you’ll pay $99 per month for each service, bringing your costs up to $198 per month plus transaction fees for merchants processing less than $500,000 annually.

As to the free software/services Fattmerchant does offer, it has a proprietary, high-quality integrated payments platform called Omni. This web-based service includes payment processing, advanced invoicing and billing, inventory management, advanced reporting features, and more. You’ll also get access to a growing list of add-ons and integrations through Fattmerchant’s app marketplace.

Fattmerchant has no long-term contracts that would require paying an early termination fee to get out of, and it has excellent customer service. It consistently lands on a lot of our Best Of lists, so we think it’s worth your consideration.

Pros

  • Transparent membership pricing with no percentage markup rate for transactions
  • Offers Omni integrated payments processing platform
  • Month-to-month billing with no long-term contracts
  • No early termination fee

Cons

  • US-based merchants only
  • Not suitable for low-volume businesses

Get Started with Fattmerchant

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3. Dharma Merchant Services

Dharma Merchant Services



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If getting a free gateway is important to you, you don’t mind paying incidental fees, and your monthly transaction volume is more than $10,000 per month, then you might want to consider Dharma Merchant Services. Dharma combines expert processing industry know-how with highly ethical business practices to cater to the unique needs of small businesses, restaurants, and nonprofits.

Dharma has some of the best advertising practices and sales transparency we’ve seen in the industry. The company uses interchange-plus pricing exclusively, and all accounts feature month-to-month billing with no early termination fees. Dharma has no account application fees, no annual fees, and no monthly minimums. It also won’t charge you any PCI compliance fees or batch fees.

Dharma advertises all of its standard rate and fee information on its website. For MOTO (virtual/eCommerce) rates, Dharma charges the following:

  • $20 monthly fee
  • Interchange + 0.20% + $0.10 per transaction
  • Numerous incidental fees (e.g., chargebacks, etc.) — all disclosed on Dharma’s website

Every account comes with Dharma’s MX Merchant online access and reporting system, which includes a virtual terminal, online reporting, a customer database, a mobile processing app, and several other services. For an additional monthly fee, you can add options, such as integrated ACH payment processing, B2B processing, invoicing, and recurring billing.

If you also take payments online, Dharma offers a choice between either the NMI Gateway or Authorize.Net. Both gateways are free to set up but cost $10 per month afterward. There is also an additional $0.05 per-transaction fee for any sales processed over the gateway. The NMI Gateway appears to have a few more specialized features. If you’re concerned about being able to take your customer data with you if you ever switch gateway providers, the NMI Gateway may be a better choice.

You can also expect high-quality, friendly, personalized service and support from the Dharma team, who are always just a phone call away. The company contributes a portion of its profits to charity, so if you’re interested in a socially-conscious company, then we strongly recommend that you consider Dharma as your next processor.

Pros

  • Interchange-plus pricing offered exclusively
  • No annual fee or monthly minimum
  • Month-to-month billing with no early termination fees
  • Discounted pricing for qualified nonprofit companies
  • Outstanding sales transparency and highly ethical business practices

Cons

  • Not recommended for businesses processing less than $10,000 per month
  • No support for high-risk or international merchants

Get Started with Dharma Merchant Services

Read our in-depth review

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4. Square

Square



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If your business processes less than $10,000 per month, you might consider Square as your MOTO processor. We typically recommend Square for stores that have physical locations. Because Square does absorb some incidental costs and gives you a free virtual terminal, it’s a processor worth your consideration if your monthly transactions remain low.

Square is a third-party processor, which means that it uses a business model with some well-known pluses and minuses. Square allows a merchant to sign up quickly and start processing almost right away. It also subjects the same merchant to higher scrutiny on risky sales and might institute account holds, freezes, and terminations more often than a traditional merchant account provider. Just make sure you don’t fall under Square’s high-risk list, and you should have little to no issue working with this company.

According to Square’s site, merchants start with a per-transaction limit of $50,000. However, going through merchant complaints from our website and other sites (such as the Better Business Bureau), many merchants encounter suspensions or terminations at a much lower threshold — some as low as the three-figure range. So keep in mind that if you go with Square, a busier-than-average month or a larger-than-average ticket size could attract unwanted attention from Square’s risk department.

As to how Square charges for MOTO transactions, you pay 3.5% + $0.15 per keyed transaction. This is the most expensive type of transaction on Square. Since many consumers today have access to the internet through their smartphones, you might want to consider setting up a website to take online orders as well. Square’s online processing is relatively less expensive at 2.9% + $0.30 per transaction, and your Square account comes with a free online store that syncs with your in-app inventory, including inventory counts and eCommerce integrations.

Square does not charge a monthly fee, statement fees, or monthly minimums. Square’s free virtual terminal allows you to enter credit card payments from any internet-connected device with a web browser. It comes with a whole suite of other services, such as stored-card capability, invoicing, recurring billing, online ordering option, customer management, advanced analytics, numerous third-party app integrations, and an API for developers.

Despite the challenges of using a third-party processor, we still think Square is an excellent deal for merchants that are just starting up, so we continue to recommend it.

Pros

  • Predictable flat-rate pricing
  • Ideal for low-volume merchants
  • No monthly fees
  • Impressive feature-set
  • Free tools for selling online

Cons

Get Started with Square

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5. National Processing

National Processing



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National Processing is a traditional merchant account processor that we at Merchant Maverick like very much. It is excellent at providing you with a merchant account that offers great pricing and at giving quality service overall. It has a very good MOTO offering, but nothing spectacular. We include National Processing in our list because, in case you take other forms of payment as well, it can’t hurt to take a serious look at a processor that is excellent across the board.

One of the things we appreciate in a processing company is advertising transparency because we think it gives a good indication of how ethically the business is run in the first place. We’re very impressed by National Processing’s commitment to truth in advertising. The company has a very informative website where not only does it disclose its own interchange-plus pricing but also provides accurate examples of real interchange rates alongside standardized markups and fees. This sort of truthful disclosure is incredibly rare to find, and the meaningful explanation of actual interchange rates and a complete list of standard account fees can give you a solid understanding of exactly how you will be charged.

For an eCommerce/MOTO-focused plan, National Processing charges as follows:

  • $10 per month account fee
  • $5 per month gateway fee
  • Interchange + 0.30% + $0.15 per transaction
  • $75,000 monthly processing volume limit

If your business does more volume than this, National Processing has two other plans you can consider: one for merchants processing between $75,000 and $200,000 per month in card sales, and one for merchants processing more than $200,000 per month.

National Processing doesn’t charge any account setup fees or annual fees. It also doesn’t require a monthly minimum. If you don’t need a free physical terminal, then you can have a contract with month-to-month billing and no early termination fee. Even if you do end up signing the version of the contract with an early termination fee, you won’t have to pay if you close or sell your business. The company will also waive the fee if you get a quote with a better rate elsewhere. (This gives it a chance to match your quote, which seems fair.)

In short, National Processing is an excellent processor overall that also happens to offer a very good MOTO pricing plan. If taking MOTO payments is only a part of your business plan, National Processing is worth considering.

Pros

  • Interchange-plus pricing
  • Offers month-to-month billing with no early termination fee
  • Good online reputation
  • A good option for budget-conscious merchants

Cons

  • Long-term contracts required in exchange for free terminal
  • Early termination fee charged in some circumstances

Get Started with National Processing

Read our in-depth review

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6. CDGcommerce

CDGcommerce



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CDGcommerce is an eCommerce specialist, which means that the pricing its merchants use most is card-not-present transactions — the same type of transaction MOTO merchants use.

CDGcommerce offers a combination of flat-rate, interchange-plus, and membership-based pricing plans, depending on your monthly processing volume. Smaller businesses processing less than $10,000 per month will be on a flat-rate plan that, at first blush, looks like what any third-party processor might offer. Eventually, though, you will be moved to a true full-service merchant account that’s far less likely to suffer a hold, freeze, or termination.

For merchants processing between $10,000 and $200,000 per month, CDGcommerce offers an interchange-plus pricing plan that represents one of the best values we’ve seen from any provider. Large businesses processing over $200,000 per month have access to a membership-based pricing plan that eliminates the per-transaction percentage fee in exchange for a single monthly subscription fee. For a detailed breakdown of CDGcommerce’s charges, please go to our full review. The pricing is also fully disclosed on its website.

All of CDGcommmerce’s contracts are month-to-month, so you can cancel at any time without penalty. CDGcommerce has also eliminated many of the excessive fees that other providers charge, including account setup fees, PCI compliance fees, and monthly minimums. Merchants who need a payment gateway can choose between CDGcommerce’s proprietary Quantum Gateway, Authorize.Net, and more. A virtual terminal comes with the gateway, and, as a MOTO business, you’ll definitely need it. The good news is that both the gateway and the virtual terminal are free. Finally, CDGcommerce backs everything up with excellent customer service and support.

While this is not vital to a MOTO business, CDGcommerce has a proprietary POS software called PastePay that can help you manage, among other things, invoicing, scheduling, online service signups, inventory management, donations, and recurring billing. It’s free with your merchant account (except for SMS text message-based marketing promotions), and if you ever decide to leave CDGcommerce, you can continue to access PastePay for a fee.

More relevant to MOTO merchants, CDGcommerce can provide you with the Chargeback Defender software that helps you manage and deal with chargebacks and the Fraud Loss Reimbursement Plan (available for an additional fee of $10/month). Given the high fraud rate of MOTO transactions, having these services available gives you some options if you ever need them.

Pros

  • Free payment gateway and virtual terminal
  • No account setup or application fees
  • Month-to-month billing with no early termination fees
  • Excellent customer service and support

Cons

  • Only available to US-based merchants

Get Started with CDGcommerce

Read our in-depth review

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What Is A MOTO Payment?

For some, “MOTO” stands for the now out-of-public-favor cell phone maker Motorola. In the payments industry, MOTO means something else entirely. Perhaps it’s time to explain some jargon.

What Does MOTO Stand For?

MOTO stands for Mail Order/Telephone Order. These days, online ordering has mostly replaced mail orders, but there are still call centers that take telephone orders. More recently, because of the COVID-19 crisis, restaurants and professional services firms (such as doctors’ offices) have begun to take MOTO payments as well.

What Is A Payment Gateway?

A payment gateway gathers payment information from an input point (e.g., virtual terminal, website shopping cart, app interface) and transmits that information to the payment processor or the acquiring bank. It also returns authorization information (payment accepted or declined). A gateway can capture several types of payment information, such as credit, debit, ACH, echeck, etc.

What Is A Virtual Terminal?

A virtual terminal is the software interface that lets a merchant type in (“key in”) payment card information to send through a gateway for processing. Sometimes, they come as part of a gateway, but other times, you have to pay for access. All MOTO sales are transacted through a virtual terminal.

What Is A CNP/Card-Not-Present Transaction?

A CNP transaction is where the payment card information isn’t dipped, swiped, or tapped directly into a physical card reader. Instead, it’s typed (keyed) into a software interface on a computer, tablet, or similar device. The merchant typically doesn’t see the customer’s card, hence “card-not-present” transaction.

Why Do CNP Transactions Cost More To Process?

CNP transactions typically cost more to process because there’s a higher instance of fraud associated with this type of transaction. Stolen card numbers are always easier to use when one doesn’t have to show a card but only has to type the number into a payment screen.

What To Expect With A MOTO Merchant Account

Whether you’re an old hand at credit card processing (but has so far mainly taken cards at physical locations or online) or completely new to it, you might find certain aspects of a MOTO merchant account surprising. We list some of them below.

Higher Rates For CNP Transactions

As already mentioned, a MOTO transaction is always a card-not-present transaction. As such, you’ll always be charged a higher rate, and you’ll definitely notice this if most of your past transactions were in-store (i.e., card-present) transactions. But if you run an online business, you won’t see any difference at all because MOTO and eCommerce are both categorized as CNP transactions and almost always charged at the same rate. There’s a reason for this higher charge. There is a statistically higher probability that a CNP transaction is a fraudulent charge, so the higher rate is to compensate processors and banks for taking this higher risk. The card associations decide the rate, and whether it’s marked up even more by your processor depends entirely on which one you use.

Payment Security (PCI Compliance, AVS, CVV Checks)

As mentioned, CNP transactions are prone to fraud. To reduce the likelihood of a thief stealing card information, MOTO merchants are subject to a higher PCI compliance requirement. For instance, at a physical store, the customer ordinarily transfers the payment information on the card directly to the reader/terminal. However, for phone orders, the employee, instead of the customer, takes the card information. It’s important to train your employee to always enter the card information directly into the virtual terminal instead of writing it on a piece of paper, and this training is a part of the PCI compliance procedure the merchant must follow. As an added security procedure, both the AVS and the CVV should be checked as a part of the transaction authorization process to reduce the risk of fraud.

Because of these added security procedures, MOTO transactions can be a little bit more complicated to keep in security compliance than card-present transactions.

Fraud, Chargebacks & Associated Troubles With MOTO Transactions

If you take MOTO transactions, no matter how careful you are, you will have to deal with fraud and chargebacks sooner or later. It might be better for you to think of them as merely a cost of doing business so that you don’t get frustrated and let that ruin your day.

Fighting chargebacks means having to spend time digging through your transaction records and answering questions. Sometimes, you will have to pay a chargeback fee, and occasionally, your processor will withhold funds, so you cannot immediately withdraw the money from the merchant account. With chargebacks, most processors won’t refund you the fee even if you end up winning the dispute.

Be sure to follow all the security procedures (check the AVS and CVV in every transaction) and maybe purchase additional fraud protection from your processor. Otherwise, take a deep breath and realize that a percentage of your sales will always be entangled in fraud and chargebacks one way or another. Focus more on increasing your sales than getting angry with thieves.

How To Find The Best MOTO Credit Card Processor

Given that this article presents a Best Of list, we think one easy way to find the “best” MOTO payment card processor is to pick from the processors listed above. Even though every business is different, one of our recommended processors should fit your needs. If you wish for more choices, we recommend you look into some of our highly-rated online processors. Because both online and MOTO transactions are CNP, an online processor’s rates should apply to MOTO transactions as well. Not only that, but online processors also need to use a gateway, and gateways often come with a virtual terminal, which you’ll need for MOTO processing.

If you have any questions about MOTO processing, please leave us a note below, and we’ll do our best to help. If there are other aspects of MOTO processing you find surprising or would like to find out more, let us know. If there’s a high demand, we might turn that into a future article.

In Summary: The Best MOTO Merchant Accounts

  1. PaymentCloud: Best for high-risk businesses.
  2. Fattmerchant: Best for high-volume merchants.
  3. Dharma Merchant Services: Best for merchants who process more than $10,000/month.
  4. Square: Best for businesses that are seasonal or process less than $10,000/month.
  5. National Processing: Best for an all-around processor.
  6. CDGcommerce: Best for an eCommerce/MOTO specialist.
Hsin-Wei Luang

Hsin-Wei Luang

Hsin-Wei is a freelance writer focused on small business and technology writing. Before becoming a writer, she worked as a techie lawyer for many years until she came to her senses. Now, in her spare time, she plays frisbee with her Mini Australian Shepherd dog.

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