How to take a card payment over the phone using a virtual terminal

By Henry Williams on Small Business UK - Advice and Ideas for UK Small Businesses and SMEs

Whether you don’t operate from a physical premises, or you want to reach customers who aren’t able to come into your store, if you want to maximise sales, having the capability to take card payments over the phone is a vital function for every small business.

To get started, all you’ll need is a phone, an internet connection, a merchant account, and a virtual terminal.

Read on to learn about the costs, regulations, and step-by-step process of taking payments over the phone.

Or, if you’re ready to get set up with a taking payments provider straight away, you can compare providers using the form above.

Virtual terminals

For taking card payments over the phone, you’ll need a virtual terminal.

A virtual terminal is a secure web or software application that allows you, the merchant, to take card payments without a credit or debit card being physically present.

Once you’ve entered the customer’s card details into the terminal, the data is automatically sent to your payment provider, and the cash, minus fees, is deposited in your account.

Taking card payments over the phone step-by-step

Once you have your virtual terminal set up, it’s quick and easy to start taking payments over the phone.

So, you’re on a call with the customer, they want to make a purchase, and they have their card ready – what next?

1. Open your virtual terminal and log in
2. Select ‘take a payment’
3. Ask the customer to read out their card details and enter them immediately into the correct payment fields
4. Enter the billing address for the payment card
5. Double check the details with the customer
6. Hit ‘confirm’ and whoosh, the money should be whizzing it’s way over to you in no time at all

Fees for taking payments over the phone

As with any card payment, there’s a fee for taking card payments over the phone, and for all virtual payments, you’re charged a Card-Not-Present (CNP) fee.

This fee is actually higher than if you’re completing a transaction using a physical card payment machine. That’s because virtual payments expose the merchant, the customer, and the payment processor to a slightly greater risk of fraud.

Fees vary across suppliers, and different providers employ different fee structures that can make it more or less costly depending on your needs.

For example:

• Some providers charge a percentage-based fee for each transaction taken through your virtual terminal. E.g. 2.5% + 25p per sale
• Others will allow you a certain number of transactions for a monthly subscription cost, with any transactions over the limit charged at a flat rate. E.g. 200 transactions for £9.99 per month + 10p per additional transaction.
• Or you could be charged on a sliding scale depending on your monthly sales volume. E.g. with PayPal, anything up to £1,500 is charged at 3.4% + 20p, between £1,500 and £6,000 at 2.9% + 20p, between £6,000 and £15,000 at 2.4% + 20p, and beyond £15,000 1.9% + 20p

Which type of fee structure you choose depends on your unique requirements. So, if you know you’re going to be taking £15,000 in payments over the phone every month, go with PayPal to get the most competitive transaction fees. If you know you’re going to make a consistent and predictable number of transactions, opt for a monthly subscription. Or, if the number and value of transactions varies wildly month-to-month, a percentage-based fee is probably your best bet.

Taking credit card payments over the phone regulations UK

Taking payments over the phone is completely safe as long as you use a trusted provider.

Any virtual terminal provider you use should be PCI DSS compliant. This stands for Payment Card Industry Data Security Standards, and is a set of strict guidelines to ensure sensitive customer information is protected during card transactions.

All major providers make it very clear that they’re PCI DSS compliant, so you won’t need to spend any effort hunting for a compliant provider.

Taking payment over the phone GDPR

It’s perfectly legal to store customer card details for future over-the-phone purchases and remain GDPR compliant, as long as those details are stored securely and not misused.

According to the European Data Protection Board (EDPB), you just need to ensure that the customer’s consent is freely given, specific, informed and unambiguous.

Next steps

If the last two years have shown anything, it’s that having the capability to take virtual payments is vital if you want to weather unforeseen circumstances. Get started taking payments today by filling in our short quiz at the top of the page.

See also: Five tips to get started taking card payments

The post How to take a card payment over the phone using a virtual terminal appeared first on Small Business UK.