Business.com aims to help business owners make informed decisions to support and grow their companies. We research and recommend products and services suitable for various business types, investing thousands of hours each year in this process.
As a business, we need to generate revenue to sustain our content. We have financial relationships with some companies we cover, earning commissions when readers purchase from our partners or share information about their needs. These relationships do not dictate our advice and recommendations. Our editorial team independently evaluates and recommends products and services based on their research and expertise. Learn more about our process and partners here.
How to Accept Credit Card Payments Over the Phone
Boost customer satisfaction with another convenient payment option.
Written by: Adam Uzialko, Senior EditorUpdated May 01, 2025
Editor Verified:
Editor Verified
A business.com editor verified this analysis to ensure it meets our standards for accuracy, expertise and integrity.
Shari Weiss,Senior Editor
Business.com earns commissions from some listed providers. Editorial Guidelines.
Table of Contents
For most businesses, accepting credit cards is essential. Partnering with a credit card processor and setting up a card reader at the point of sale (POS) is typically part of the cost of doing business for entrepreneurs. But what happens when customers want to use their credit card away from the POS?
Many businesses, from restaurants to retailers, take orders over the phone. Fortunately, many of the best credit card processors support this option, allowing merchants to offer an added service that boosts customer satisfaction in an increasingly card-centric society. Accepting credit cards over the phone can also help businesses close sales faster and reduce collection times. We’ll explain methods for collecting credit card payments over the phone and share information to help you get started.
Editor’s note: Looking for a credit card processor for your business? Fill out the below questionnaire to have our vendor partners contact you with free information.
How to accept credit card payments over the phone
You can accept card payments over the phone in several ways:
Key in card numbers on your credit card terminal: Ask your customer to read off the card number, expiration date and card verification value (CVV) code while you type the information into your POS system’s credit card terminal. Importantly, instruct employees never to write down cardholder information ― a practice that can put your business at risk of violating credit card processing rules and laws, including Payment Card Industry Data Security Standards (PCI DSS).
Key in card numbers on your mobile credit card processing app: You may want to accept credit card payments with your phone instead of a terminal. To do so, just enter your customer’s credit card information into the mobile app your credit card processor provides. (The best mobile credit card processors help you accept all major credit cards, provide free payment apps, sell reasonably priced EMV card readers and provide generous customer support.)
Key in card information using a virtual terminal: Virtual terminals are essentially web-based credit card processing applications. They sometimes offer Level 2 or Level 3 processing ― methods that capture additional data to verify a transaction’s authenticity. This functionality typically incurs an additional monthly charge, making it a better fit for businesses that accept high-dollar transactions or experience a high volume of phone transactions.
Types of businesses that accept credit card payments over the phone
Accepting credit cards over the phone is expected in some industries. For example, if you offer delivery or curbside pickup, customers expect to be able to order and pay by phone. Additionally, some businesses accept phone payments to boost convenience and improve customer service.
Here are a few business types that frequently accept credit card payments over the phone:
Restaurants
Retailers offering curbside pickup and delivery options
Professional firms like doctors’ offices
Freelancers and consultants
Home services companies
Construction and renovation contractors
Travel agencies and hotels
Medical practices and pharmacies
Telemarketing and catalog sales
FYI
Restaurants that accept phone orders need a robust phone system to accommodate high call volumes. Check out our reviews of the best business phone systems for restaurants to get started.
How do merchants ensure security with phone payments?
When a customer pays with a credit or debit card over the phone, there’s always a risk that the customer isn’t the authorized cardholder. In addition to incurring higher processing rates, these transactions leave merchants vulnerable to fraudulent charges.
Scott Waters, senior vice president of business development at Merchly, emphasized that PCI compliance is the top security concern when accepting credit card payments over the phone.
“It is always recommended to use a third-party interactive voice response or payment system that will accept payments through touch-tone keypad to ensure compliance with PCI standards,” Waters advised.
Waters also noted that employee dishonesty is a considerable risk. “It’s always recommended if employees are able to take payments over the phone to restrict their access to phones, notes and other methods of storing customer personal information,” Waters cautioned.
To avoid fraudulent charges, merchants should take the following security measures:
Require complete information: When accepting a credit card over the phone, key in the complete information, including the card number, expiration date, CVV code and the customer’s full name as it appears on the card. Request the customer’s phone number and complete billing and shipping addresses, including ZIP codes.
Use a secure POS system: The best POS systems reduce the chance of fraud with technology that verifies customer accounts and secures transactions. For example, Clover POS provides end-to-end encryption to ensure secure and PCI-compliant transactions. (Read our Clover POS review for more information about its POS security features.)
Confirm delivery of products: Always confirm product delivery with customers who pay over the phone via credit card. A clear payment and delivery record can help you confirm the transaction is legitimate.
Match the customer’s ZIP code: If the billing and shipping address ZIP codes don’t match, ask the customer why. If the answer doesn’t sound reasonable, ask for another payment method or require the goods to be delivered to the billing address.
Bottom Line
Accepting credit cards over the phone carries a more substantial inherent risk of credit card fraud and may incur higher rates and per-transaction fees.
Benefits of accepting credit cards over the phone
Accepting credit cards over the phone can bring many benefits to your business, including the following:
Customer convenience: Customer convenience is a top concern for retailers and restaurants. Accommodating customer payment preferences ― including phone payments ― boosts satisfaction and fosters repeat business.
Recapture lost sales: If a customer can’t buy something in-store because it’s out of stock or your website’s payment page isn’t working, you can recapture those lost sales by offering a phone-in order option.
Faster payments: For businesses that invoice customers, accepting phone payments can help you collect payments sooner and reduce collection costs.
Supports virtual business models: Businesses that take payments remotely — whether by phone or online — may not need a physical storefront or office space at all.
“Another pro of using a processor with a direct bank relationship is an underwritten merchant account,” Waters added. “These accounts have been looked at by a representative at the processor and bank and generally come with higher daily and monthly limits as well as lower processing fees.”
Drawbacks of accepting credit cards over the phone
Security risks, employee fraud and higher payment processing fees are the primary drawbacks of accepting credit cards over the phone.
Security risks
Frank Pagano, managing partner of VizyPay, noted that fraud and security issues are the biggest risks associated with accepting credit cards by phone.
“Without the right encryption (or lack thereof), card information can be compromised by interception or through simple human error by manually inputting the information,” Pagnano cautioned.
Additionally, phone transactions are especially vulnerable to fraud. “This also opens the door for card-not-present fraud, where criminals can use compromised credit card information for unauthorized purchases over the phone,” Pagnano explained. Additionally, a customer may be defrauded while thinking they’re processing a transaction with a legitimate business.
Merchants must mitigate these risks by implementing robust security practices when taking phone payments:
Gather complete cardholder information.
Invest in a secure POS system and credit card reader.
Always confirm delivery of goods with the customer to establish a verifiable paper trail.
Employee fraud
Employee fraud is another unfortunate risk merchants must consider. An untrustworthy employee might misuse or sell the credit card information they collect. To maintain PCI compliance and reduce this risk, ensure there’s no written record of customer card data. Instead, associates should enter the information directly into the POS system, where it’s encrypted and secured.
Higher processing fees
Processors charge more for card-not-present transactions due to the increased risk of fraud and chargebacks. When a card isn’t physically swiped, dipped or tapped, there’s a greater chance the transaction is unauthorized, so processors offset that risk with higher fees.
Tip
Keep a list of the delivery addresses associated with prior disputes and credit card chargebacks. Check incoming order addresses against this list to help avoid fraud.
What does it cost to accept credit cards over the phone?
Credit card processing costs vary widely depending on the service provider and pricing model. However, you’ll likely pay more to accept credit cards over the phone than for in-person, card-present transactions.
Most credit card processors charge merchants between 2 percent and 4 percent of each transaction. Card-not-present transactions — including phone orders — typically fall on the higher end of that range due to the greater risk of fraud and chargebacks. In addition to the percentage fee, most processors also charge a fixed per-transaction fee (often around 10 to 30 cents) for card-not-present payments.
FAQs
Many businesses already accept credit cards with PayPal online and in-store. To accept credit card payments over the phone using PayPal, you must pay for a virtual terminal in addition to PayPal's credit card fees. You can use PayPal's virtual terminal on a mobile device or desktop if you have internet access.
When a customer calls in to place an order, launch the virtual terminal on PayPal and key in the customer's credit card information, billing address and shipping address. Once you've filled out all the customer's information, you can complete the transaction and print a receipt, packing slip and shipping label.
PayPal's virtual terminal costs $30 per month, with a transaction rate of 3.39 percent plus 29 cents per transaction.
Yes. First, download the Square Point of Sale app on an Android or iOS device. When signing up, you can also choose to have a free magstripe card reader mailed to you or purchase an EMV-compliant card reader.
Once your account is active, set up your inventory and adjust pricing and tax settings as needed or enter item prices manually when a customer is ready to purchase. You can accept credit cards over the phone by keying in the customer's card number, expiration date and CVV code.
You can also use Square's virtual terminal on a desktop to process phone payments without a mobile device. Simply log in to your Square Dashboard, navigate to the Virtual Terminal and enter the customer's payment information manually.
Keep in mind that credit card transactions that are keyed in manually are significantly more expensive with Square. Swiped cards are charged at a flat rate of 2.6 percent plus 15 cents per transaction while keyed-in cards (entered manually) cost 3.5 percent plus 15 cents.
To accept credit card payments over the phone, you'll need a merchant account with a credit card processor. This gives you access to the tools required to process payments, including payment software and a virtual terminal (note that some processors charge extra for virtual terminal access).
Alternatively, you may use a mobile credit card processing app with manual entry capability or a secure credit card reader if you're also taking in-person payments.
You'll need to set up your processes to train your employees properly:
First, decide how to enter customer credit card information: via a virtual terminal, in the payment processing app or using the POS system's credit card terminal.
Then, be clear on the information you'll require from customers. You'll need the card type, card number, expiration date and CVV number; you may also want the billing ZIP code, complete billing address, email address and phone number. Remember, the more information you gather, the less fraud risk. Still, some customers may be reluctant to share extensive information.
Next, create a process for entering orders in a customer's account and selecting the products and other order details.
You should also have a process to verify all information and send the customer a paper or digital receipt.
Once you have all of these processes set up, write down the steps and train your employees using a combination of demonstrations or videos and role-play.
Adam Uzialko, the accomplished senior editor at Business News Daily, brings a wealth of experience that extends beyond traditional writing and editing roles. With a robust background as co-founder and managing editor of a digital marketing venture, his insights are steeped in the practicalities of small business management.
At business.com, Adam contributes to our digital marketing coverage, providing guidance on everything from measuring campaign ROI to conducting a marketing analysis to using retargeting to boost conversions.
Since 2015, Adam has also meticulously evaluated a myriad of small business solutions, including document management services and email and text message marketing software. His approach is hands-on; he not only tests the products firsthand but also engages in user interviews and direct dialogues with the companies behind them. Adam's expertise spans content strategy, editorial direction and adept team management, ensuring that his work resonates with entrepreneurs navigating the dynamic landscape of online commerce.