Finding An Inexpensive MOTO Merchant Account

A MOTO merchant account (MOTO stands for Mail Order & Telephone Order) can be among the most difficult types of accounts to obtain for an affordable rate.

The reason is simple:

• The account has all the limitations of online merchant accounts, namely, the card is not physically present so the possibility of fraud is greater and the rates are higher.

• No third-party processing possibilities.

• It also has all the shortcoming of retail merchant accounts, namely, you will need additional "equipment" in the form of expensive software to purchase (not lease).

The software is a so-called "virtual terminal," which involves a credit card processing software system that provides a secure way for businesses who wish to manually input orders into their computer, so they can accept credit cards by phone, email, mail or fax.

Virtual terminals for moto merchant accounts have taken over the market from the former desktop authorization terminals, as they reduce the complications and expense otherwise involved with credit card processing online.

Software costs...

A major way that these merchant accounts become expensive is with the accompanying software.

Like physical terminals, virtual terminals can be very expensive.

Often, merchant account providers will offer to lease the software to you.

Don't lease.

The reason? It only makes the software more expensive and locks you into a long-term relationship. Payments are fine, as long as you are paying to purchase.

If you can't afford the purchase, ask yourself whether you are on too much of a "shoestring" to afford the moto merchant account.

More and more online merchant account providers are offering free credit card processing software when you purchase a merchant account from them.

In fact, many retail merchant accounts come with virtual terminal software that will allow vendors to physically input credit card information.

Speaking of retail merchant accounts, you'll find that my advice for shopping for a moto merchant account is very similar to retail merchant accounts.

There are two places to find a merchant account for your business: banks and merchant account providers.

SIDEBAR While a third-party processor can't help you accept credit cards over the phone or through the mail, they are easy to obtain (free actually) and implement in a website, which you really should have. If you have an offline business you think won't translate online, consider this.

Option 1: Banks

When you apply for a moto merchant account, you will be required to demonstrate that your business has had an extended period of financial stability.

Expect to present your business plan, your financial statements and various other documents. Make sure you know what you need ahead of your visit to the bank.

Option 2: Merchant Account Providers

ISOs (Independent Sales Organizations) online can connect you with a merchant account. Some providers are also the underwriters of their accounts. They will generally require the same information as banks, though they tend to be less stringent in their requirements.

Either way, the most important thing to look for is the opportunity to apply for free so you can apply to several and compare the rates they quote to you.

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