accept credit cards over the phone - man talking on a phone in front of a POS system

How to accept credit card payments over the phone

Friday, October 22, 2021

As small businesses expand channels for remote payment in a growing virtual world, it is necessary to establish a process for accepting credit card payments over the phone. While phone credit card payments tend to be a more traditional channel for payment, they are necessary for customers who rely on e-commerce industries and require broader accessibility than in-person payment at a brick-and-mortar establishment.

With the growth of merchant account and payment service providers, it is important to know the difference and begin to gather what equipment you will need to take credit card payments over the phone safely and securely. In this article, we'll lay out the differences in providers, the equipment required for payment, a step-by-step process for a transaction, and security protocols to implement throughout the telephone-based credit card payment process.

The first step in getting started accepting credit cards over the phone is understanding the difference between merchant account providers and payment service providers

 

Merchant account providers vs payment service providers

Merchant account providers are able to generate a dedicated merchant account for your business that operates similar to a bank account that can accept credit card payments. Additionally, merchant account providers are able to provide the necessary equipment for payment processing, for example, software or terminals, that you can utilize when taking payments over the phone. 

Payment service providers are third-party companies that support businesses to accept a variety of payments. With enhanced technology and innovation, these companies are able to monitor and ensure secure transactions into the designated business accounts. With payment service providers, funds are transferred into the business bank accounts after they have been aggregated and organized. 

You'll need one of these providers in order to get started. 

Equipment needed to accept credit card payments over the phone

To begin phone credit card processing, you will need a few pieces of software and hardware. Once all of these pieces of equipment are in place, you are ready for phone-based credit card payments.

Virtual Terminal

A virtual terminal is a software or web-based application that enables payments to be made without the physical presence of a credit card. In essence, your computer or internet-based device becomes a credit card terminal. Virtual terminals are often provided through a merchant account or payment service provider.

POS System

Point of sale (POS) systems enable customers to make payments and complete business transactions. POS systems or applications are essential for phone credit card payments. Mobile application developers have developed applications that can be downloaded directly to a mobile device so that credit card payments are easily made over the phone. If a customer provides their credit card information, this can be manually entered when using a POS system or application. 

Credit Card Reader

Even if the credit card is not physically available, credit card payments over the phone can be run through a reader or processor through manual entry. Different providers use various designs; however, many readers or processors can be plugged in to mobile devices for integration with a POS system or application.

The process of taking over the phone credit card payment

  1. Set up the virtual terminal and all associated technology required for payment (including hardware and software). Your virtual terminal is accessible through a device (computer, mobile device, etc.) so it can be used for mobile payments. 

  2. Gather required credit card information and card details. Once your virtual terminal has been established, you will need to determine what credit card information is required so that you consistently gather the correct data during card transactions. In addition to the billing address information (especially for shipping products), you will need to record the following pieces of data from the cardholder:

     Credit card number  Customer name
     Expiration date  Billing ZIP code
     Security or CVV code  
       
  3. Information input. Gather all customer-based data to complete processing of the order. As the order is completed, be sure to communicate the final charge to be placed on the credit card. Prior to completion of credit card payment, be sure to secure customer verbal authorization for submission. Once this is secured, you can gather the credit card information and submit payment. When the credit card payment is complete, inquire if the customer would like a receipt generated and electronically sent. The virtual terminal will confirm if a transaction has been successful or not. 

Ensuring safety when accepting credit card payments over the phone 

Processing and accepting credit card payments over the phone carry more risk than in-person credit card payments. Typically, a customer can show proof of identification when in person. Therefore, when completing credit card payments over the phone, you should take the following steps and precautions:

  • Record all relevant information from the customer(the more, the better). You can store this information so that if there are any issues in the future, you can address them quickly and with a paper trail. 
  • Confirm the billing and shipping address associated with the credit card payment. If the addresses do not match, this may require more details from the customer on why this is the case. 
  • Utilize delivery confirmation and/or signature for the purchaser. Following up on the delivery with the purchaser can be a helpful way to ensure additional security in the transaction process. 
  • Reference the Payment Card Industry Security Standards Council for additional guidance on reducing risk when accepting credit card payments over the phone. 


Heartland is the point of sale, payments and payroll solution of choice for nearly 1,000,000 businesses on a mission to sell more, keep customers coming back and have more time to focus on building a remarkable business. Learn more at heartland.us