Merchant Glossary: Business Type

The business type is another question that is typically asked on a new merchant application. Your business type should fit in to one of the following categories: Retail, Restaurant, Hotel, Mail Order / Telephone Order, Internet. A description of each follows:

Retail - This business type refers to merchants in a face-to-face environment that sell tangible goods, where card is present, and where the card is swiped through a point of sale terminal or similar card reader device. Retail merchants may also take a manual imprint of the transaction since they are face to face with the customer.

Restaurant - A business that serves food, are in a face-to-face environment, and use point of sale terminals to swipe credit cards. The key difference with straight retail, however, is that the product is consumable (less risk for chargebacks) and tips are usually entered as part of the transaction.

Hotel - This refers to merchants in a face-to-face environment that sell lodging and hospitality services. These merchants also usually use conventional point of sale terminals swipe the transactions.

Mail Order / Telephone Order (MOTO) - This refers to any business that is not face-to-face with the customer, and the transactions are keyed into the terminal and are not swiped. The term mail order / telephone order comes from the fact that the credit card number is received either over the phone or through the mail, but it encompasses all transactions that are keyed no matter how they are received.

Internet - A business type is Internet if credit card information is collected over the Internet via a web page. The transaction may or may not be processed in real time, but if the customer is entering their credit card information on a website, the business is considered an Internet business. Note that a business may have a web page but might not be an Internet business type. Only businesses that actually that gather the credit card order over the Internet are considered this business type.

Other articles terms explained in the Merchant Glossary: