How to take card payments over the phone

by Maxine Bremner

Published • 17/01/2024 | Updated • 17/01/2024


How to take card payments over the phone

by Maxine Bremner

Published • 17/01/2024 | Updated • 17/01/2024


Though remote payment methods are largely self-service, there are still many business models where taking card payments over the phone is expected. This can include restaurants, retailers that offer a click-and-collect service, and various kinds of contractors.

Understanding this payment method can help you facilitate greater flexibility for your customers and provide an all-around more positive experience with your brand. 

In this guide, we’ll look at how to take payments over the phone, go over the costs and benefits associated with these kinds of payments, and help you decide whether it’s right for your business.

What do you need when taking card payments over the phone?

There are many different payment providers that offer services centred around taking payments over the phone. 

Though they may take slightly different forms, accepting card payments over the phone generally requires 3 key components:

1. A Merchant Account

Merchant accounts are a type of bank account typically facilitated by payment provider companies, which are set up to receive payments from debit or credit cards. 

These accounts are often able to receive transactions from additional payment methods such as digital wallet apps.

2. Customer Card Details

Just like when using online payment methods, accepting payments over the phone requires the customer to provide their card details. These include the card number, expiration date, and CVV.

3. Payment Gateway or Virtual Terminal

Every transaction taken over the phone requires you to have a web-based portal that connects to your merchant account. This is usually either a payment gateway or a virtual terminal

These are the pieces of software that will receive the customer’s card details and process the transaction, transferring funds to your account minus any associated fees.

Businesses that accept card payments over the phone

Here’s some of the business types where this payment method is especially common, and how they benefit from offering over the phone card payments.

Restaurants and food delivery services

Many restaurants now facilitate reservations and payments through online portals. However, this is a business model where bookings over the phone are still common. 

Many restaurants require a deposit for large reservations, or offer catering services which must be paid for up-front. In these situations, being able to take orders over the phone can give customers a more flexible way to pay. 

Even with the abundance of takeaway apps, food delivery companies can also provide greater flexibility by taking payments over the phone. 

When placing large orders or detailing special dietary requirements, it can be helpful for customers to talk to someone directly and make a payment in one smooth interaction.

Small retailers and e-commerce stores

If you deliver physical products, you may have customers that prefer to place orders over the phone rather than online. 

Take, for example, a business where you create custom products for people looking for personalised gifts. Taking card payments over phone calls can facilitate a more fluid and simple customer experience.

Hotels and hospitality

When travelling, many people using hotels and hospitality businesses will want to speak to staff directly and discuss the details of their booking. This is especially true for boutique hotels or private bed and breakfasts where the accommodation offering can vary from one booking to the next. 

Taking card payments over the phone can allow customers and staff to confirm key details of a stay and process payments in a single interaction. This allows businesses to ensure simpler, smoother customer service.

Service-based businesses

Service-based businesses, for example cleaners, plumbers, and gardeners, are increasingly using mobile card readers to take their payments in-person. However, there are many businesses where facilitating over-the-phone card payments can help both the merchant running the business and their customers. 

Imagine a scenario where you’ve been contacted about a particularly complex landscaping job. You may not be able to give an accurate quote upon the initial visit to a client’s property. Going away to review the details and calculate the charges, you’ll be able to break the quote down to your client over the phone and accept their deposit immediately. 

Running a service-based business?

SumUp’s free digital invoice tool allows you to create professional invoices based on your data and share them with clients in an instant.

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Freelancers and consultants

Freelancers and consultants often have to confirm the details of a large project over the phone with their clients. Once the project parameters are agreed upon, these merchants may require a deposit before work can commence

Accepting card payments over the phone can help reduce the number of steps between an initial consultation and delivery. This can help you develop a more seamless experience for you and your clients.

Event organisers

Companies that help clients to organise events often have the need to go over the details of a client’s event over the phone. 

Having the means to accept card payments over the phone can streamline the booking process for these merchants. Event organisers can talk through a run-down of the planned event, dynamically adjust the price, then accept a deposit or full payment in one call.

Steps to taking a card payment over the phone

The steps towards taking card payments over the phone will vary somewhat depending on the payment provider you use. 

Generally, the process involves opening a payment portal managed by the provider, entering the customers’ payment details as provided over the phone, and processing the transaction.

We offer a virtual terminal service to our customers designed to make taking a card payment over the phone as simple as possible

If you’re a SumUp merchant or thinking about becoming one in the future, here’s how to take payments over the phone through our platform:

How to set up over the phone card payments with SumUp

  1. Use your SumUp account to send our support team an email requesting to set up a virtual terminal. This is the online payment portal our customers use to process card payments over the phone.

  2. We’ll send you a virtual terminal application form to complete. At this stage, we’ll request certain pieces of documentation to prove your business activity. This might include links to your brand’s online assets such as its website and social media pages, your annual tax returns, your employer identification number, etc.

  3. We’ll enable virtual terminals on your account. You’ll now be able to access the feature through your online dashboard or SumUp mobile app and start using the terminal to start taking payments over the phone.

How to take a card payment over the phone

  1. Navigate to Virtual Terminal on your SumUp online dashboard or app.

  2. Take the customer’s card number and payment information and enter it into the relevant fields.

  3. Enter the transaction amount.

  4. Click “Charge”.

Want to keep your payment methods flexible?

SumUp merchants can set up contactless Tap to Pay on iPhone from the SumUp app quickly and easily.

Start accepting payments

Protecting your business and customers against phone fraud

Though being able to accept card payments over the phone can mean increased convenience for both business owners and their customers, it’s not without its drawbacks. 

One of the key downsides to taking card payments over the phone is the increased risk of card not present fraud.

Card-not-present (CNP) fraud involves fraudsters stealing a person’s payment card information and using it to pay for things in transactions where the cardholder doesn’t have to be physically present, for example when making a payment over the phone.

This kind of fraud can be hard to detect, as the merchant isn’t able to look for physical signs of tampering. Furthermore, the amounts stolen are often small enough that cardholders don’t see anything suspicious on their statements.

If you’re going to be taking card payments over the phone, it’s crucial to implement best practices for preventing this kind of fraud. 

Not only will this protect your customers and maintain trust in your brand, but also reduce the risk of chargeback fraud. Chargeback fraud can result in you losing both money and merchandise.

Security measures (AVS, CVV, and 2FA checks)

One of the most fundamental ways that businesses can protect their customers from fraud is by implementing three checks: 

  • AVS (Address Verification System)

  • CVV (Credit Verification Value) 

  • 2FA (2 Factor Authentication)

Both of these security measures are used to verify the identity of the cardholder, though in different ways.

With an AVS check, a customer’s billing address as stated in the transaction is compared to the customer address held by the issuing bank. If the addresses match partially, or not at all, the merchant is then alerted and will have to make a decision as to whether to proceed with the transaction.

With a CVV check, the customer is asked to confirm the 3 numbers printed on the back of their payment card. This check is intended to confirm that the card is physically with the cardholder. These checks are required for any card-not-present transaction, though it’s important that customers are regularly reminded not to record their CVV code or share it with anyone.

With two factor authentication (2FA) customers will be required to enter an additional piece of unique information on top of their account password and CVV. This is often a randomly-generated code that’s sent to them as a text message or accessible through an authenticator app. This security layer makes it much harder for hackers to breach a payment account.

Regulations and PCI DSS compliance

Card fraud is a huge problem worldwide. Governments and regulatory bodies often lay out specific best practices that businesses should adhere to for greater security.

The UK Government’s National Cyber Security Centre (NCSC), for example, offers a free Cyber Action Plan quiz for sole traders and small businesses. This helps to identify weak spots and form more effective security policies.

One of the best ways for you to ensure your card payments stay safe for both you and your customers is researching and complying with the PCI DSS (Payment Card Industry Data Security Standard).

Compliance with this security standard is a requirement for any merchants that process, transmit, or store cardholder data. PCI DSS compliance is divided into 12 different requirements covering different aspects of payment security, including having: 

  • A secure network.

  • Monitoring and testing for weaknesses.

  • Maintaining formal security policies applying to both permanent employees and contractors.

Security process for training staff

Human error can potentially be a major cause of security breaches and the loss of sensitive information. With this in mind, it’s essential to make sure you have a clear process in place for training any staff who will be responsible for taking payments over the phone.

Some of the key aspects of security staff training that you should plan for include:

  • How to identify suspicious phone calls.

  • How common forms of CNP fraud work.

  • Clear guidelines on how to communicate with customers over the phone to prevent fraud.

  • The escalation process for when an employee thinks they’ve had a suspicious phone call.

The costs of accepting payments over the phone

The means of accepting card payments over the phone rarely comes as a standalone product. This service is typically one part of a wider payment processing membership. Because of this, it can be hard to give a single, accurate answer when discussing the cost of accepting card payments via phone calls.

Some payment providers offer virtual terminals for fixed merchant credit card fees alongside a transaction fee determined by the size of the transaction. Other providers will facilitate payment portals for a transaction fee only.

Note that this transaction fee is usually a fixed amount combined with a percentage of the purchase amount, though some companies will require either a fixed monetary amount or a percentage alone.

Need to take payments remotely?

SumUp’s payment links can be shared across popular online communication channels and allow your customers to make a payment in just a few clicks.

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7 alternatives to taking card payments over the phone

Like many merchants, you may have the need to take card payments remotely, but have decided that taking card payments isn’t right for your business.

Here are 7 alternatives to taking card payments over the phone you may want to consider instead.

1. Online payment gateways

Online payment gateways are a popular business payment methods for businesses that need to take card-not-present payments, and are commonly used for e-commerce checkouts and booking systems.

These gateways work in a similar way to virtual terminals, requiring the customer’s card number, expiry date, and CVV. The main difference is that the customer enters the details themselves using an online form rather than reading the information to someone over the phone.

2. E-commerce platforms

Many platforms designed to help merchants build online stores come with payment processing technology integrated. Working in a similar way to online payment gateways, these platforms typically come with integrated payment portals that accept credit or debit cards and other popular payment methods.

3. Recurring billing systems

If your business offers a subscription or membership-based service, then using a recurring billing system is usually the most convenient way to take card payments remotely. 

With one of these systems, a customer only has to enter their card details using an online portal and agree to the recurring billing frequency once. From there, agreed-upon payments will be taken out at a specified interval, e.g on the 1st of every month. 

This payment method is a popular choice for businesses that provide a product or service on an ongoing basis, such as personal trainers or subscription box services.

4. QR codes

Many payment providers offer features that allow merchants to generate QR codes which will link to a payment portal where customers can enter their own card details. 

This payment method is commonly associated with cafes, restaurants, and other physical premises. However, it can also be useful in more remote contexts, for example sending flyers to customers in the mail with QR codes that invite them to take advantage of a special offer.

5. Payment links

Payment links work in a similar way to QR codes, though they’re more digital-oriented. With this payment method, businesses can generate links taking customers to a payment portal, then share them via email or other online communication methods. 

From there, the customer simply clicks the link to go to a payment portal, enters their card details, and authorises the payment.

6. Virtual wallet apps

Many mobile wallet apps allow businesses to set up an account and begin receiving payments from customers who are using the same service. Many of these virtual wallet apps can be integrated easily with regular payment portals. 

This will give customers a quick, fluid payment experience when paying on a mobile device or computer, as customers will often have their payment details saved to their virtual wallet account, enabling them to approve payments in just a few steps.

7. Peer to peer money transfer apps

Though peer-to-peer payment apps are typically used for money transfer between 2 private individuals, some of these apps have features that allow businesses to set up official profiles they can use to accept payments directly from customers, either for one-off purchases or recurring billing. 

Disclaimer: The contents of this page are intended for informational purposes only and should not be construed as professional advice. For matters requiring legal or financial expertise, it’s recommended to seek guidance from qualified professionals.

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