What is Mail Order? Advantages and Disadvantages

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What is the Mail Order Payment System?

Mail order is an alternative payment method used primarily in situations where payment needs to be made by credit card, but the card is not physically present at the business. This system comes into play when both the cardholder and the card are not physically present at the business, offering a valuable solution for companies involved in remote sales. The mail order system allows businesses to manually collect credit card information through a payment form and process transactions. This form includes information such as the cardholder's name, card number, expiration date, security code (CVV), and the cardholder’s signature. Once the form is filled out, either in writing or digitally, the business manually enters the information into the POS device to complete the payment. This system is generally used in situations such as:

• When there is no internet connection, making online payment systems unavailable

• During power outages, when POS devices are offline

• When the POS device is malfunctioning or unavailable

• In businesses making sales via phone or catalog, to allow customers to pay without physically visiting the business.

How Does Mail Order Work?

The mail order system is a method that enables payments to be collected when the cardholder is not physically present at the point of sale. This method is generally applied in two ways:

Manual Entry at a Physical Business Location

The customer visits the business for a purchase but may have a damaged magnetic stripe or a malfunctioning chip on their credit or debit card. In such cases, when the card cannot be physically swiped, the payment is manually processed by the business. The business representative manually enters the card details (card number, expiration date, security code, etc.) into the POS device to complete the transaction. This method is commonly used as an alternative when contactless or chip payment options are unavailable.

Remote Payment via a Form

In this method, the customer is not physically present at the business. To make the payment, the business sends a mail order payment form to the customer. The form generally requests the following information from the customer:

• Cardholder’s name

• Card number

• Expiration date

• Security code (CVV)

• Billing information

• Identification details

• Payment amount and transaction details

The customer fills out, signs, and sends the form back to the business. This submission can be done via email, fax, mail, or sometimes by phone. After reviewing and confirming the information on the form, the business manually enters the details into the POS device to process the payment.

What Information is Needed to Make a Mail Order Payment?

The form that must be filled out for mail order transactions typically includes the following information:

• Cardholder’s name

• Credit card number

• Expiration date

• CVV (security) code

• Payment amount and date

• Recipient company name

• Address and contact information

• Cardholder’s signature

Main Advantages of Mail Order

Convenience and Accessibility: Mail order allows customers to make purchases regardless of their location. Transactions can be made without the need for a POS device or internet connection.

Flexible Payment Options: This method supports installment payments, bonus usage, and promotional offers, providing customers with more payment flexibility.

Time Savings: Orders can be placed without needing to visit a store. This creates a significant time advantage for both individual users and businesses.

Access to Product Variety: The limitations of physical store inventories are eliminated. Users can place orders from different branches.

Privacy: Keeping personal information confidential is a significant advantage for customers who prefer to avoid face-to-face contact.

Order Tracking and Easy Returns: Orders are recorded in online systems, making them easy to track. Additionally, return processes are transparent and can be managed quickly.

Virtual POS and E-commerce Integration: New generation mail order systems are designed to integrate seamlessly with virtual POS solutions. This integration allows for automated and fast processing of payments without the need for manual entry of customer information. Card details are securely processed through the virtual POS infrastructure, completing transactions in seconds and transferring the payment directly to the business’s account.

Who is the Mail Order System Suitable For?

The mail order payment system can be used in many different sectors and business models. It offers an important payment solution, especially for businesses without a physical store or a completed e-commerce infrastructure. Some businesses that can benefit from the mail order system include:

Businesses Without a Physical Store

For businesses that do not have a physical store and operate only online or over the phone, the mail order payment system provides an effective solution to securely collect customer payments. These businesses often rely on communication with customers over the internet, and the mail order system enables them to process payments quickly and efficiently.

Businesses That Have Not Fully Developed Their E-commerce Infrastructure

Many small businesses may decide to build e-commerce sites but have not yet fully developed their infrastructure. In this case, the mail order payment system offers an effective alternative for receiving online payments. Without the need to invest in e-commerce platforms, these businesses can continue making sales by accepting payments via phone or email. Additionally, the system ensures secure payment collection, as bank and credit card details are protected during the transaction.

Brands with Wholesale Sales to Customers in Different Cities

For brands that engage in wholesale sales and have customers in different cities or countries, the mail order system provides a practical way to overcome geographical distances and collect payments. Especially for large orders, transactions made via phone or email, instead of traditional methods requiring physical payment, save both time and costs.

Freelancers and Consultants in the Service Sector

For freelancers, consultants, therapists, or coaches working in the service sector, the mail order payment system offers a flexible payment method. They can communicate with their clients via phone or email and collect payments after providing their services. This system is particularly preferred when service fees need to be collected upfront or in installments, ensuring both security and convenience.

Virtual POS and Mail Order

Usage Methods

Virtual POS: A virtual POS allows customers to enter their credit card or bank card details to make payments on an e-commerce site or digital platform. This performs the payment process in the online environment, similar to physical POS devices.

Mail Order: Mail order payments are made through phone or email. In this system, customers provide their card details to a sales representative to complete the payment. Typically, no transactions are made at physical stores and it is used primarily for remote sales.

Payment Method

Virtual POS: The customer enters the payment page and submits their credit or bank card information through an online form. The system automatically receives the payment approval.

Mail Order: The customer provides their credit card details to the seller via phone or email. The seller manually enters the details into the payment system.

Security

Virtual POS: Virtual POS systems generally offer high security measures (3D Secure, SSL certificates, etc.) and include automatic fraud detection features.

Mail Order: The Mail Order system is less secure since credit card information is directly transmitted through a person, and manual processes carry a higher risk of errors. These types of transactions can be more susceptible to fraud.

Transaction Time

Virtual POS: Payment transactions are processed instantly. The seller receives immediate approval from the payment system, and the transaction is completed.

Mail Order: The transaction process may take longer since the seller must manually enter card details into the system. Additionally, there may be a delay in receiving payment approval.

Integration

Virtual POS: Virtual POS requires integration with your website. Typically, online payment infrastructure is set up through agreements with payment providers.

Mail Order: Mail order usually does not require any technical integration. The seller manually collects card details and processes the payment.

Conclusion

The mail order payment system provides an important payment solution, particularly for businesses that do not have a physical store or have not completed their e-commerce infrastructure. Advantages such as flexible payment options, convenience, and privacy are among the main reasons for its preference. However, the need for manual processing and security risks should also be considered. When used correctly, the mail order system offers significant benefits to businesses and is an indispensable payment method, especially for remote sales companies.