Merchant Account Services: Evaluating Touchtone Credit Card Processing

Touchtone credit card processing allows a merchant to accept credit payment using a touchtone telephone. Independent selling organizations (ISOs) offer touchtone processing as a mail / order telephone order (MOTO) account. In addition to permitting payment by telephone, MOTO services permit payment via onsite card terminal, virtual terminal, and terminal software, the last of which turns a computer terminal into a payment terminal.

How does the touchtone process work?

When accepting a payment, a merchant performs the following actions using the buttons on a touchtone telephone:

  • Dials an 800 number that connects to an interactive response system.
  • Enters a PIN that grants access to the touchtone account.
  • Enters the customer’s credit card information.
  • Enters the total dollar amount of the sale.

Touchtone transactions are recorded by a computer, and settled every 24 hours. Funds are transferred to a merchant’s checking account by ACH payment within 72 hours. As with other merchant account services, the merchant receives a monthly account statement that lists daily transactions. The merchant can also receive account information over the telephone by connecting to a voice response system.

Who uses touchtone processing?

Touchtone processing typically appeals to small, mobile merchants. Common examples of merchants who use touchtone processing are: home based merchants, small retail merchants, merchants who sell at events, merchants who sell seasonally, and merchants who accept payment upon job completion, such as landscapers and painters. However, when they experience frequent transactions, these merchants often opt for a wireless terminal account instead of a touchtone account for reasons listed below.

How does touchtone processing compare to a wireless processing?

At first glance, the benefits of touchtone processing and using a wireless terminal are similar: both accommodate mobile businesses and involve less start up cost than an onsite retail terminal. However, wireless terminals offer notable advantages that touchtone processing does not, particularly:

  • High transaction security
  • Lower discount rates due to high transaction security
  • Faster transaction time in terms of physical actions and processing speed

Merchants with a low transaction volume may choose a MOTO business account because they feel the cost of a wireless terminal is unjustified. But for mobile merchants with a high transaction volume, a wireless card terminal is the best choice due to the advantages above.

In addition to being marketed to merchants with low volume, low-ticket transactions, touchtone accounts are recommended for merchants with low volume, high-ticket transactions. Yet, the higher discount rate of a touchtone account can result in large chunks of revenue being lost on high-ticket transactions.

AVPS has the processing solutions you need

At AVPS, we know that different businesses need different merchant account services. That is why we offer account services for business that are large and small, mobile and stationary. AVPS has 25 years of experience serving merchants, and 16 years of experience serving small businesses. If your business needs to accept payments on the go, online, over the telephone, or in another capacity, call us today to explore your options.

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