Mail Order/Telephone Order Merchant Accounts are know as “MO/TO” transactions in the payment processing industry. This solution is where you use a knuckle-buster & 1-800 number for authorization on credit card transactions.
The solution allows a merchant to be mobile to process a transaction, but what most merchants do not realize is that all systems offer this solution as a back up to all other solutions.
Example: If the Point-of-sale Terminal is not working or if a Merchant needs to accept a transaction away from their retail location they can still get authorization on their credit card sales by calling into the merchant account service providers toll-free number. The system works much like telephone banking. It is all automated and works by punching the credit card info on through your touch-tone phone.
MO/TO Merchant Account Rates
This type of solution is usually called IVR or ARU in the industry. Typically these types of services have monthly admin fee attached to them, around $12-$30 depending on the service provider. Business’s will find the discount rates are higher due to that the credit card processors see these transactions as ‘card not present’ or consider ‘non-qualified’ transactions because the card processor cannot verify that the card was present, thus presenting itself a a higher risk for fraud.
SIDENOTE: Even if you use the old knuckle buster for card present transactions to prove the card was present, most merchant account service providers will still charge the Non-Qualified rates. Those slips are really only good to you if happen to have a chargeback and need proof of a signature.
Rates can vary from company to company, however most Canadian MO/TO credit card processing rates range from 2.25% – 3.00% (plus 25cents – 75 cents per transaction) – any higher then that and you will want to get a rate review. You will mostly likely also have some other admin fees. like statement fee etc. What determines your discount rate is:
- Average Ticket Price per customer
- Monthly Sales Volume purchased on credit cards
The lower your average ticket price and the higher the monthly business volume the lower the rate you will qualify for.
