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MOTO Merchant Account
Processing Rates
In an industry where
direct marketing is in vogue, the
dealers usually communicate with their
customers through e-mail, telephone, or
mail, often with the use of cold calling
methods, in order to elicit
“call-to-action” from a customer. The
“Mail Order and Telephone Order” (MOTO)
merchants work in an environment where
the card is absent. This is similar to
eCommerce where the merchants end up
paying higher amounts for processing
when compared to the merchants who
operate physical establishments. This is
because, in the MOTO operating
environment, there is high probability
of the occurrence of customer disputes
which results in chargebacks. There are
a few dissimilarities between the 2
card-not-present dealer types in the
manner in which the card payments are
accepted which results in different
capabilities for payment acceptance.
The processing of
payments in a MOTO merchant account are
done by using the terminal software
which is installed on the personal
computer with the help of virtual
terminals. Hence the web browser can be
used for the processing of transactions
on the web site of the service provider.
Following are a few
processing fees which a MOTO merchant
may be charged for:
-
Discount Rate – These
rates should be the same for
establishments which opt for direct
marketing as well as for the web-based
merchants. A reasonable discount rate is
around 2.19% or even lesser. One must
ensure that the provider of merchant
accounts should charge a lesser rate
with respect to debit cards. In this
case, a discount rate of 1.98% is
acceptable. The prospective processor
for payments should mention the pricing
model used by them in order to select
the best options.
-
Transaction Fee – Almost
all the providers of merchant accounts
charge a transaction fee. It is usually
close to $0.25.
-
Set up and Application
fees – A merchant must always remember
that an application fee or a set up fee
must never be paid.
-
Virtual Terminal Fee – A
Virtual Terminal is nothing but a
service which helps the MOTO business
merchants to enter the payment
information of their consumers via a web
– browser. This service directly enters
the consumer information into the bank
system of the merchant account. There
should be no charge taken setting
virtual terminals. A monthly charge
should also not be collected.
-
Statement Fee – All the
merchant accounts have a fee to be paid
at the end of every month. The statement
fee is one among the other entities
which is charged on monthly basis.
-
Support Fee – A merchant
account owner should resist from paying
the support fees.
The main processing fees
difference between direct merchants and
eCommerce is due to the payment with
regard to gateway-related charges.
Payment Gateways are not used by direct
merchants since their consumers do not
use the internet for placing orders.
Instead, virtual terminals are used and
the details are entered manually. The
payment acceptance resolution for direct
marketing provides a cheaper service for
the processing of payments when compared
to the eCommerce solution. |
