How To Take Card Payments Over the Phone

Whether it’s requesting a deposit or chasing an invoice, taking payments over the phone can save you valuable time. People are busy, but that doesn’t stop you needing things to move fast.

Although the process is decades old, there’s some unease surrounding whether (and how) to take payments over the phone. Still, over-the-phone card payments hold incredible potential for all businesses, so let’s clear up some of the biggest questions and concerns that merchants have.

What are over-the-phone payments?

Over-the-phone payments are card transactions where the customer provides their payment details verbally during a phone call, rather than being physically present to tap, insert or swipe their card. The transaction is then processed using a virtual terminal.

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Is it possible to take card payments over the phone?

Yes, and many people actually prefer it. Over-the-phone payments are especially good for business when:

• You have a remote or delivery-based business where the customer doesn’t visit you or your store in-person.
• You work on-the-go, leaving no time to take immediate payments or visit customers at a later date.
• You and the customer would both prefer a quicker processing time than with cheque or bank transfer.
• You don’t want to keep cash on your person or at your premises.
• You want to create safeguards for your business by taking upfront deposits from customers.

For customers, many simply prefer the human interaction before parting with their cash. If they’ve called up to ask about your products, it’s also easier for them to just pay there and then. Plus, if paying over the phone means they’ll get their items faster, that’s a huge bonus.

What businesses use over-the-phone payments?

Over-the-phone payments are an integral part of hospitality operations, but many different types of businesses find it useful to learn how to accept payment over the phone. Some key examples are:

• Takeaway restaurants (taking food orders)
• Hotels (taking booking deposits or full payment)
• Beauty salons (taking booking deposits or full payment)
• Retail stores (reserving items for collection)
• Professional services providers (e.g. consultants, tradespeople) taking payment without a dedicated online payment platform

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How to take card payments over the phone with a virtual terminal

Many payment providers, including Square, offer a virtual terminal that lets you process card payments remotely.

Square Virtual Terminal

Taking payments over the phone is simple and secure when you follow these steps:

1. Sign in via Square Dashboard or sign up for Square
2. Hit ‘Take a Payment’ in the menu
3. Call the customer and ask them to provide their card details
4. Complete all payment fields
5. Double check the information with the customer
6. Hit ‘Charge’
7. The sale is complete

The payment will then be transferred into your account the next day.

Keyed in payments in POS app

If you’re using the Square POS app, you might receive an over-the-phone payment request while you’re at the till. You may also be required to manually key in someone’s card details whilst they’re in-store, for example if they’ve left their card at home. The process is just as easy as with Square Virtual Terminal:

1. Key in the amount or add the items that the customer is purchasing
2. Hit ‘Charge’ and select ‘Manual card entry’
3. Key in the customer’s card details and hit ‘Charge’

Advantages of over-the-phone payments

• Get paid faster: No waiting for cheques to clear or bank transfers to arrive. Payments process immediately and reach your account the next day.
• Work from anywhere: Whether you’re on a job, travelling or working from home, you can take payments without being tied to a fixed location or till. Read how Eastway Electrical transformed its business by enabling card payment.
• Reduce no-shows: Taking deposits over the phone helps secure bookings and protects your business from last-minute cancellations.
• Keep customers happy: Some people prefer speaking to a person before making a payment, especially for larger purchases or when they have questions.

Disadvantages of over-the-phone payments

• Increased fraud risk: Without the physical card present, card details need to be verbally shared and are harder to verify, which means there’s a greater chance of fraudulent transactions. This makes it extra important to choose a payment provider with robust security measures.
• Higher transaction fees: Because card-not-present transactions carry more risk than card-present payments, payment providers typically charge slightly higher fees.
• Potential for errors: Card numbers can be misheard or mistyped, which can lead to failed payments and the need to start again.

Is it safe to take payments over the phone?

Yes, it’s safe to take payments over the phone when you follow the right process. As a business, the biggest risks associated with phone payment processing come from not following PCI DSS compliance. In short, this refers to your consent to safely and securely accept, store, process and transmit cardholder data during card transactions.

Non-compliance can result in fines for your business, so it’s always worth ensuring you’re doing things properly. First, choose a payment provider who will do the compliance legwork for you. All Square hardware has end-to-end encryption out of the box and we maintain PCI compliant software at no additional cost to you.

With your PCI-compliant system in place, train staff how to take payments over the phone in a secure way. Staff should know how to enter credit card details directly into the terminal, and that no cardholder data should be written down or saved anywhere else. Instruct staff never to record calls when over-the-phone payments are being made, and not to repeat card details or any sensitive data out loud during the call.

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How much does it cost to take card payments over the phone?

It’s worth noting that manually entered card transactions carry a higher risk than those when the cardholder is present to complete the information themselves. As a result, credit card networks put protection measures in place, resulting in slightly higher fees from your payment provider.

Square charges 2.5% per transaction for payments made through a virtual terminal or digitally via invoicing. Your customers won’t pay any extra.

Faster payments, on-the-go flexibility and quicker deliveries for your customers are all great reasons to accept over-the-phone payments from your customers. And remember, if your customers prefer not to pay over the phone, Square Invoices is a great alternative, allowing them to pay the invoice via card from their own device.