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Looking for credit card processing for phone orders? For restaurants, wholesalers, and delivery-based businesses, taking credit cards over the phone is a fast and straightforward way to get paid. The human-to-human interaction of a phone order can also ease a customer’s mind in a way that online orders can’t. In B2B, when an invoice can easily surpass $5,000, that emotional reassurance becomes priceless.
The convenience of taking phone orders is unfortunately offset by higher costs and security risks. However, we can help! Century Business Solutions offers safe and cost-effective credit card processing for phone orders, as well as tips to further lower your rates.
What is a phone order?
A phone order is a credit card transaction that takes place over a phone call. In most cases, the customer will read off their credit card number and information. The employee will type the information into a terminal (a device that processes credit cards).
Phone orders are distinct from mobile orders, which are online orders that take place on a smart phone. Customers typically use an internet browser or mobile app to place mobile orders.
Why is it more expensive to accept credit cards over the phone?
There are two types of credit card transactions: Card Present (CP) and Card Not Present (CNP) transactions.
Card Present transactions occur when the card can be seen in person. In CP transactions, the shopkeeper can verify the identity of the purchaser through several methods, including signature, PIN number, and facial verification in some cases. These in-person transactions are considered safer by card issuing entities because the cardholder’s identity can be verified and secured in so many ways, which reduces the likelihood that a fraudulent transaction is taking place.
Telephone orders, along with online and mail orders, fall under the category of Card Not Present transactions. Because the card cannot be handled in person, the ways that you can verify the identity of the cardholder are limited in number and effectiveness. Asking the cardholder to provide additional information, such as a CVV code and billing address, is the most common verification for CNP transactions.
At this point in time, Card Not Present transactions are much harder to secure than their in-person counterparts. According to a study by Javelin Strategy & Research, CNP fraud is 81% more likely than CP fraud. To account for the increased risk, card issuing companies pass the cost along to businesses by increasing rates on these transactions.
To summarize the situation, credit card processing for phone orders is more expensive because of the increased risk of fraud. Still, there are some measures you can take to lower your rates on phone orders—we’ll outline them further down.
What do I need to take phone orders?
There are four types of methods that will work for taking phone orders: physical terminals, mobile phone payments, virtual terminals, and ERP/accounting payment integrations.
Physical terminals are primarily used for Card Present transactions, but they work just as effectively for Card Not Present transactions. Ask your customer to recite their payment information. Punch the information in using the number pad. While a good option for businesses that already own a physical terminal, we don’t recommend that you purchase a physical terminal if most of your transactions will be over the phone or online.
Mobile phone payments are mobile applications that allow you to accept payments on a mobile device. Just input your customer’s card information into the mobile app and hit “Submit.” This option relies on a piece of equipment you likely already have—your smartphone. If you haven’t invested in a terminal yet and don’t plan on processing many cards in-person, a mobile payment terminal is a handy option.
The virtual terminal is a web application that allows you to run credit cards on your computer. You’ll type in your customer’s card information and run the transaction, as with the previous methods.
While we offer all four options, we like to recommend using an ERP/accounting integration when accepting phone orders because it comes with additional opportunities to save time and money. An ERP/accounting integration allows you to enter payments directly inside your accounting software screens. Once you’ve processed the transaction, the integration will apply the payment back to the associated invoice and update the AR and GL accordingly.
Best of all, you can save your customers’ payment information to your system for repeat orders. The next time your customer calls to place an order over the phone, simply pull up their saved card and run the payment. Their sensitive information is encrypted and tokenized offsite in a PCI compliant manner, which reduces your liability in the event of fraud.
How can I lower my rates on phone orders?
The easiest way to lower your fees when credit card processing for phone orders is to ask your customer for more payment details. In addition to the card number and cardholder’s name, ask every customer for the card expiration date, CVV code, and billing zip code.
Requesting more payment information on every CNP transaction will decrease the potential for fraud. As long as you’re already using a payment gateway with high-level security features, card issuing entities will often reward your diligence with lower rates.
Credit card processing for phone orders doesn’t have to cost you a fortune. Find a gateway with enhanced security, and always ask your customers for more payment information on phone orders. Decrease the risk of fraud, and you’ll increase the potential for cost savings.
No matter how your company accepts payments, we’ve got a solution for you. Our full suite of payment solutions covers everything from online stores to phone orders to in-person transactions.
You’ll also have complimentary access to our in-house, 5-star rated Support team and online customer payment portal, allowing customers to pay you online at their own convenience. For credit card processing for phone orders and any other credit card processing needs, we’re happy to provide a solution.