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MOTO payments (Mail Order and Telephone Order) allow UK businesses to accept card payments when the cardholder is not physically present, with card details taken over the phone, by post, fax, or email. They are essential for sectors such as hospitality, healthcare, trade services, and B2B invoicing, but because the card and cardholder cannot be verified in person, MOTO transactions carry higher fraud liability and typically cost more to process than card-present or standard ecommerce payments. This guide explains how MOTO payments work, what they cost in 2024, and how UK businesses can process them securely and compliantly.
Key Takeaways
- MOTO payments let businesses take card details by phone, post, or email using a virtual terminal rather than a card machine.
- UK MOTO transaction fees typically run 0.3-0.8 percentage points higher than card-present rates, often landing between 1.8% and 3.5% depending on provider and risk profile.
- Because the cardholder is not present and no chip or PIN is used, liability for fraudulent chargebacks usually sits with the merchant, not the card issuer.
- PCI DSS compliance is mandatory for any business taking card details over the phone, and call recording of full card numbers is not permitted.
- 3D Secure cannot be applied to genuine MOTO transactions, which is why underwriters treat this channel as higher risk and price it accordingly.
- Choosing a provider with a dedicated, PCI-compliant virtual terminal - rather than manually keying details into a card machine - significantly reduces fraud and compliance risk.
- Businesses processing high MOTO volumes should compare providers specifically on MOTO rates, not just standard card-present or ecommerce pricing.
What Are MOTO Payments and Who Uses Them in the UK?
MOTO stands for Mail Order and Telephone Order, and it refers to any card transaction where the customer provides their card number, expiry date, CVV, and billing address remotely rather than presenting the physical card. This is one of three broad "card not present" categories, alongside ecommerce payments and recurring billing, and it remains a significant payment channel across the UK economy despite the rise of online checkout.
MOTO payments are particularly common among:
- Hotels, guest houses, and holiday letting agencies taking deposits and balances over the phone
- Private healthcare providers, dental practices, and clinics booking and charging for appointments
- Trade and home improvement businesses invoicing customers after a job is completed
- Professional services firms such as solicitors, accountants, and consultants
- Mail order retailers and catalogue businesses still taking postal or telephone orders
- B2B suppliers processing orders placed by phone or purchase order followed by a card payment
For many of these businesses, MOTO is not a legacy channel but an active, customer-preferred way to pay, particularly for older customers, high-value bookings, or transactions that involve a conversation before payment. Understanding how MOTO fits alongside your other payment methods is worth reviewing alongside our guide to payment gateways vs merchant accounts, since MOTO processing typically requires both a merchant account and a virtual terminal facility.
How MOTO Payments Work
The Virtual Terminal Process
When a customer provides card details by phone, a member of staff logs into a virtual terminal - a secure, web-based dashboard supplied by the payment provider - and manually enters the card number, expiry date, CVV, billing address, and transaction amount. The virtual terminal then submits this information to the card network for authorisation, in much the same way a physical card machine would, except no card is physically read.
Once authorised, the transaction is processed and settled into the merchant's bank account within the provider's normal settlement timeframe, typically one to three working days for most UK acquirers. No signature or PIN is captured, and because the transaction cannot use 3D Secure authentication (there is no browser session to redirect the customer to), the card scheme's liability shift protections that apply to ecommerce transactions do not apply here.
Mail and Postal Orders
For genuine mail order transactions, the customer writes their card details on an order form and posts it to the business, which then keys the details into the virtual terminal in the same way as a phone order. This channel has declined significantly but persists in catalogue retail, some charities, and certain subscription services.
Where MOTO Fits With Other Channels
Most UK payment providers bundle MOTO processing as an add-on to a standard merchant account, alongside card machine (card-present) and ecommerce gateway processing. Businesses that take payments across multiple channels - for example a hotel taking phone bookings, walk-in payments, and online bookings - usually need a provider that supports all three under one merchant ID to simplify reconciliation and reporting.
MOTO Payment Costs in the UK
MOTO transactions cost more to process than card-present transactions because the fraud risk is materially higher. Acquirers and card schemes price this risk into the interchange and scheme fees that underpin your overall rate, and providers typically add a further margin to reflect chargeback exposure.
Typical UK MOTO Pricing
| Payment Channel | Typical UK Rate Range | Fraud Liability | Authentication Used |
|---|---|---|---|
| Card-present (chip and PIN) | 0.3% - 1.5% | Card issuer (in most fraud cases) | PIN or contactless verification |
| Ecommerce (online checkout) | 0.5% - 2.0% | Shared, shifts to issuer with 3D Secure | 3D Secure / Strong Customer Authentication |
| MOTO (phone/mail order) | 1.5% - 3.5% | Merchant (in most cases) | None - manual entry only |
| Recurring/subscription billing | 1.0% - 2.5% | Merchant, unless CIT/MIT rules followed correctly | Initial transaction only |
These figures are indicative ranges seen across UK providers such as Worldpay, Barclaycard, Elavon, Paymentsense, and SumUp, and actual rates depend heavily on your average transaction value, monthly volume, industry risk category, and processing history. Businesses with high average order values or a strong track record of low chargebacks can often negotiate towards the lower end of the MOTO range.
Additional Fees to Watch For
- Virtual terminal licence fees - often £5-£20 per month per user login
- Authorisation fees - a small per-transaction fee (typically 2p-5p) charged in addition to the percentage rate
- Chargeback fees - usually £15-£30 per disputed transaction, regardless of outcome
- PCI compliance fees - annual or monthly charges for maintaining compliance validation
- Minimum monthly service charges - some providers apply a minimum fee if MOTO volumes are low
Given the range of pricing structures on offer, it is worth comparing providers specifically on MOTO rates rather than assuming your existing card machine or ecommerce rate will simply extend to phone orders.
Fraud Risk and Chargeback Liability
MOTO transactions are inherently higher risk because there is no way to verify that the person providing the card details is the legitimate cardholder. Unlike ecommerce transactions, which can use 3D Secure to shift liability to the card issuer under certain conditions, MOTO transactions almost always leave the merchant liable if the transaction turns out to be fraudulent.
Common MOTO Fraud Scenarios
- A fraudster uses stolen card details to place a phone order for goods or services
- A legitimate cardholder later disputes a transaction as "unrecognised" (friendly fraud)
- Card details are intercepted from an unsecured postal order form or unencrypted email
- Staff error in keying card details leads to a failed or duplicate transaction dispute
Reducing MOTO Fraud Risk
UK businesses can take several practical steps to reduce exposure:
- Use Address Verification Service (AVS) and CVV checks on every transaction, and decline or flag mismatches for manual review
- Keep detailed records of the order, including date, time, staff member, and a description of goods or services agreed
- Never accept card details by unencrypted email, and avoid writing card numbers on paper order forms wherever possible
- Use a virtual terminal with built-in fraud screening and velocity checks (multiple transactions on the same card in a short period)
- Set sensible transaction limits and require secondary authorisation for high-value MOTO payments
- Train staff to recognise pressure tactics or urgency cues commonly used in social engineering fraud
Because chargeback liability sits overwhelmingly with the merchant in the MOTO channel, providers will assess your fraud controls closely during onboarding, and ongoing chargeback rates above 1% of transactions can trigger review or even account termination under card scheme monitoring programmes.
PCI DSS Compliance for MOTO Payments
Any UK business taking card payments by phone must comply with the Payment Card Industry Data Security Standard (PCI DSS), regardless of size or transaction volume. This is a card scheme requirement, not optional best practice, and non-compliance can result in fines from your acquirer or increased processing costs.
Key PCI Requirements for Phone Payments
- No recording of full card numbers or CVV - if calls are recorded for training or quality purposes, the payment portion must be paused or the audio must be masked
- No storage of card details on paper, in spreadsheets, in CRM systems, or in email
- Secure transmission of card data entered into the virtual terminal, using TLS encryption
- Access controls restricting which staff members can view or enter card details
- Annual self-assessment questionnaire (SAQ) completion, typically SAQ-B or SAQ-C-VT for MOTO merchants using a compliant virtual terminal
Many providers now offer PCI-compliant call flow solutions that use DTMF masking (allowing customers to key their own card details on the telephone keypad, with tones masked so staff never hear the numbers) or IVR-based payment lines. These reduce your PCI scope considerably and are increasingly the recommended approach for higher-volume MOTO operations such as hospitality reservation desks and healthcare booking teams.
Choosing a MOTO Payment Provider
Not all UK payment providers offer MOTO processing as standard, and the quality of virtual terminals varies considerably. When comparing providers, businesses should look beyond the headline rate and assess the full package.
What to Compare
| Feature | Why It Matters |
|---|---|
| MOTO transaction rate | Directly affects your cost per booking or order; compare like-for-like against your typical transaction value |
| Virtual terminal usability | Staff will use this daily; a clunky interface slows down calls and increases keying errors |
| AVS and CVV fraud tools | Essential for reducing chargeback exposure without a card-present environment |
| PCI-compliant call handling | DTMF masking or IVR options reduce compliance burden and staff training requirements |
| Multi-channel support | Ability to process card-present, MOTO, and ecommerce under one account simplifies reporting |
| Settlement speed | Faster settlement (next day vs three days) improves cash flow, particularly for seasonal businesses |
| Contract flexibility | Rolling monthly contracts avoid long tie-ins if your MOTO volumes fluctuate seasonally |
Providers commonly used by UK MOTO merchants include Worldpay, Barclaycard, Elavon, Paymentsense, Dojo, and Takepayments, each with different pricing structures and virtual terminal capabilities. If you are also processing online payments, it is worth reviewing our guide to ecommerce payment gateways to see whether a single provider can efficiently support both channels.
Setting Up MOTO Processing for Your Business
Step-by-Step Onboarding
- Apply for a merchant account with MOTO enabled - not all standard applications include this by default, so it must be requested explicitly
- Underwriting review - providers assess your industry, average transaction value, and expected MOTO volume as a proportion of total sales, since higher MOTO exposure increases underwriting risk
- Virtual terminal setup - staff logins are created with appropriate access permissions and fraud screening rules configured
- PCI compliance validation - complete the relevant SAQ and implement call handling procedures that avoid recording or storing card data
- Staff training - covering fraud red flags, AVS/CVV checks, and secure handling of customer information during calls
- Go live and monitor - review chargeback rates and fraud flags regularly, particularly in the first few months
Businesses considering a broader payment infrastructure review, including integrating MOTO with existing booking or CRM systems, may also find our article on payment gateway integrations useful for understanding how virtual terminals can connect to back-office systems.
MOTO Payments vs Other Card-Not-Present Channels
It is worth understanding how MOTO compares to other remote payment methods so you can choose the right channel, or combination of channels, for your customer base.
| Channel | Customer Experience | Fraud Protection Available | Best Suited To |
|---|---|---|---|
| MOTO (phone order) | Speaks to staff member, gives details verbally | AVS, CVV, manual review only | Bookings, quotes, older customer bases |
| Payment link / hosted checkout | Receives a secure link by SMS or email to pay themselves | 3D Secure, full SCA protection | Invoicing, deposits, remote sales |
| Ecommerce checkout | Self-service on website | 3D Secure, full SCA protection | Retail, online bookings |
| Recurring billing | One-time setup, then automatic charges | Initial authentication only | Subscriptions, membership fees |
Many businesses now use payment links as a lower-fraud alternative to traditional MOTO, sending customers a secure link to enter their own card details online rather than reading them out over the phone. This shifts the transaction into the ecommerce category, allows 3D Secure authentication, and can reduce both fraud risk and processing costs, making it worth considering as a complement to, or partial replacement for, traditional MOTO calls.
Frequently Asked Questions
What does MOTO mean in payment processing?
MOTO stands for Mail Order and Telephone Order, describing any transaction where a customer provides card details remotely rather than presenting the physical card. It is a recognised card-not-present category used across UK sectors including hospitality, healthcare, and trade services.
Are MOTO payments more expensive than card machine payments?
Yes, MOTO transactions typically cost between 1.5% and 3.5% in the UK, compared to 0.3% to 1.5% for card-present transactions, because the fraud risk is significantly higher without chip and PIN verification. Providers price this additional risk into their MOTO-specific rates.
Who is liable if a MOTO transaction is fraudulent?
In most cases, the merchant is liable for fraudulent MOTO transactions because 3D Secure authentication cannot be applied and the card is not physically verified. This is why robust AVS and CVV checks, order documentation, and fraud screening are essential for any business taking phone or mail orders.
Can I record phone calls that include card payment details?
You can record calls for training and quality purposes, but PCI DSS rules prohibit recording or storing the full card number and CVV. Most businesses either pause recording during the payment section of the call or use DTMF masking technology so the payment details are never captured in audio form.
Do I need a separate merchant account for MOTO payments?
You do not necessarily need a completely separate merchant account, but you do need MOTO processing explicitly enabled on your account and a compatible virtual terminal. Most UK providers can add MOTO capability to an existing card machine or ecommerce merchant account, subject to underwriting approval.
What is a virtual terminal and do I need one for MOTO?
A virtual terminal is a secure, web-based dashboard that allows staff to manually key in card details to process a payment without a physical card machine. It is the standard tool for processing MOTO transactions and is provided by your payment processor as part of a MOTO-enabled merchant account.
Can payment links replace traditional MOTO phone payments?
Payment links can replace many MOTO use cases by allowing the customer to enter their own card details securely online, which enables 3D Secure authentication and typically lower processing rates. However, some customers, particularly older or less digitally confident ones, still prefer to pay verbally over the phone, so many businesses offer both options.
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