MOTO (Mail Order/Telephone Order) transactions are card-not-present payments where customers provide their order and payment details through regular mail, fax, or telephone. In such transactions, the cardholder authorizes the merchant to process the transaction by sharing their card details.
MOTO transactions are exempt from Strong Customer Authentication (SCA) requirements. In the European Economic Area, payments processed with manually entered card details, such as those in MOTO transactions, are automatically categorized as MOTO by payment processors.
The MOTO transactions flow is as follows:
- Require minimal data for payment processing (only card number).
- Exempt from SCA/PSD2 regulations.
- Generally have a moderate payment success rate.
- Classified as a high-risk transactions, making them more susceptible to chargebacks.
MOTO transactions, traditionally popular in TV sales, remain in use, especially in regions like the USA. They offer a flexible payment solution for merchants, especially in scenarios where physical card access is not possible.