Both debit cards, as well as credit cards, have become omnipresent. Almost everyone out there carries them. Fewer customers use cash for payments in the modern era. Therefore, accepting credit cards is imperative for most businesses. Partnering with a reliable credit card processor and setting up a dedicated card reader at the point of sale (POS) is essential for modern entrepreneurs. However, there are many card-not-present scenarios where business owners will need to accept credit cards.
Most businesses out there, from retailers to restaurants, are taking orders over the phone. It is mainly regarded as an added service for boosting the overall customer satisfaction in the modern society that is highly credit card-focused. The acceptance of credit cards over the phone also helps businesses close sales quickly while reducing collection times.
Some of the common types of businesses that accept credit cards by phone are:
- Retailers providing access to outside pickup as well as delivery options
- Home service companies
- Consultants and freelancers
- Professional organizations like doctor’s offices
- Renovation and construction contractors
Accepting Credit Card Payments Over the Phone
Acceptance of credit card payments is an integral way of boosting customer satisfaction. It offers customers another convenient way to ensure that payments are made in a timely manner. Moreover, it also helps businesses drive more sales. There are several ways of accepting credit card payments through phone.
- Keying in the Card Numbers on the Credit Card Terminal: One of the simplest ways of accepting the credit card over the phone is by asking customers to read off the card number, CVV code, and expiration date while typing in information into the credit card terminal at the point of sale.
- Keying in Credit Card Numbers on the Mobile-based Credit Card Processing Application: Alternatively, if a business is making use of a phone along with a mobile app for accepting credit cards rather than the terminal, credit card information of the customers can be entered into the dedicated mobile app as provided by the credit card processor.
- Keying in Credit Card Information with the Help of a Virtual Terminal: It is possible to key in the customers’ credit card information with the help of a virtual terminal. A virtual terminal is a web-based credit card processing application. With virtual terminals, it is sometimes possible to reduce the overall costs associated with credit card processing. This can be achieved with the help of level 2 or level 3 data processing which entails submitting additional data (order number, shipping details, invoice number, etc) to qualify for a lower interchange rate.
Additional information is captured that helps verify the authenticity of the transaction. Therefore, level 2 and level 3 processing helps reduce the overall rate that the credit card processor charges for phone-based transactions. However, this is usually available through a premium payment gateway and virtual terminal, although more and more gateways are handling level 2 and level 3 data standard now. This can be especially useful for businesses that accept high-dollar transactions or process a higher purchase volume as card-not-present by phone.
Businesses should be aware that acceptance of credit cards over the phone is less secure than the acceptance of a credit card physically at the point of sale. Due to the higher risks of fraud, credit card processors typically charge increased per-transaction fees and rates for transactions that are card-not-present. This includes keying in credit card information on a mobile phone.
Costs of Accepting Credit Cards Over the Phones
The exact amount charged upon the acceptance of credit card information over the phone will ultimately depend on the pricing models and credit card processors. However, acceptance of credit card information over the phone-based platform will usually cost a business more than the acceptance of physical credit cards with a proper credit card reader.
Most credit card processors charge around 2 percent to 4 percent of the total transaction amount. For CNP (card-not-present) transactions the percentage is typically on the higher end of that range. This increase is due to higher risks of accepting payments without using a physical credit card. Additionally, it is standard for many credit card processors to charge a per-transaction rate or fee for high-risk transactions – especially payments done over the phone.
Safety of Paying Over the Phone with the Help of a Credit Card
When a customer ends up paying with a debit or credit card over the phone, there is an associated risk that the customer might not be the authorized user of the credit card. The risk causes credit card processors to increase their rates on card-not-present transactions – including keyed-in credit card numbers accepted over a phone-based platform. To avoid fraud-based charges, businesses can undertake proper steps towards securing transactions over the phone.
- Using a Secure POS System: Most reliable POS systems tend to be secure and help in reducing the risks of any fraud. Popular POS systems mostly feature technology for the verification of customers’ information.
- Ensure Complete Information: When accepting credit card information over the phone it is imperative to ensure complete information – including credit card number, CVV or CVC code, expiration date, and the customer’s full name as it is printed on the credit card. Customers should be requested to provide detailed shipping and billing addresses, phone number, and ZIP code.
- Confirm Delivery of Products: The delivery of products should be confirmed. The establishment of a proper record of delivery and payments can help businesses confirm that the transaction was authenticated and legitimate.
While it is essential to ensure maximum security while accepting credit cards over the phone, keeping customers satisfied and happy is also important.