MO/TO Processing

manual credit card swiper

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:

  1. Average Ticket Price per customer
  2. 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.