Merchant Account - Retail or MOTO? Part 1 of 2

Let’s start off with what Retail and MOTO mean:

MOTO = Mail Order Telephone Order, credit card card not present.

Retail = Store where card is present and swiped.

As you many be able to tell by the above definitions, the key issue that defines what the account should be is whether or not your customers credit card is present or not during a typical transaction. If the credit card is commonly present and swiped the account should be retail and if the card is typically not present it should be MOTO.

Does It Really Matter How I Set Up My Merchant Account?

It actually does! Most merchant accounts are set up retail because these accounts have the lowest rates and therefore are the easiest to sell. However, if you are set up retail and the majority of your transactions are card not present this could cost you dearly. Here’s why - if you are set up retail and you have a card not present transaction and you enter the incorrect zip code on a Visa transaction it will go to EIRF! That means a minimum fee increase of .76% (typically more like 1.25%)!

Sometimes I see a true MOTO merchant having 35% of their transactions going to EIRF because of this single issue. Therefore, if you are a business with mostly card not present transactions and you see either a bunch of “Visa non-qualification” or EIRF on your statement, switch to a MOTO account quick!

If you are set up MOTO you will be required to enter the zip code and the street number but these are not required to match. Therefore, your non-qualification/EIRF issue will go away immediately.

There are some differences in the pricing of these two account types and I will explain that in part 2 of this post.

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