How to Process a Credit Card over the Telephone

Three Methods:Using Telephone ProcessingUsing a Mobile Card ReaderConsidering Alternatives

Telephone credit card processing is low cost and simple. You can use a cell phone, a portable phone, or even a landline to process payments. Telephone credit card processing is best for seasonal merchants or merchants with low volume sales. In addition, payments can be processed over the phone using a mobile card reader. These attachment plug into a smartphone or tablet and can be used to quickly and easily process transactions. Both of these options allow you to accept credit card payments on the go and avoid having to set up a full terminal.

Method 1
Using Telephone Processing

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    Decide to use a telephone processor. Telephone credit card processing offers several advantages. You can process all Visa, MasterCard, American Express, and Discover from your phone. If you take your business to trade shows, or have a mobile business, telephone credit card processing is a useful solution, as you will not have to lug a terminal with you or find a secure connection. Because of this, It is perfect for contractors, delivery, craft shows, seasonal businesses, food service, home based businesses, and other small, mobile businesses.[1]
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    Choose a processor. There are a number of processors that offer telephone processing. Some of these, like TransFirst Dialpay, work by calling in to a number, while others, like Flint, are smart phone apps that work through scanning the card in with the phone's camera.[2] Search online for telephone payment processors to find several options to investigate further.
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    Set up your account. Contact your chosen processor and work with them to set up an account. Depending on the processor, you may be required to set up a merchant account, which allows for your payments to be processed and the proceeds transferred to your business bank account. Your qualification for the account might be dependent on your credit history or sales volume. Again, this all depends on your chosen processor.
    • When you get your account, you will be given a phone number to call in to so that you can enter your credit card information.
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    Call in to the processor. Dial the phone number you were provided on any functioning phone and enter your merchant ID and your customer's credit card information (number and expiration date) and amount of sale using the keypad of your phone.[3]
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    Follow the processor's instructions. While processing a payment over the phone, make sure that you carefully follow the automated voice commands, and also record the approval number for future reference. After the verification of all the information and payment particulars at the other end, you will receive an approval confirmation.
    • You will not receive a receipt to give the customer from the processor. However, you can use a cheap credit card imprinter to manually create a simple receipt for them.[4]
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    Receive your funds.Funds will accordingly be transferred to your business checking account in a couple of business days. There is no hassle of sales slips, or deposit slips. You can receive the details of all your completed transactions at the end of each month in your statement. In addition, daily sales activity can be followed anytime using your phone.[5]

Method 2
Using a Mobile Card Reader

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    Assess the suitability of a mobile card reader to your business. Mobile card readers are a great option for mobile businesses or small business that have not had time to build up the credit history necessary to receive a traditional credit card merchant account. These card readers are provided to sellers by the payment processor, who then handles the transaction with your bank and the buyer's. This greatly simplifies the transactions process, but comes with its own set of issues. For example, you'll need some sort of internet connection to receive payment. For businesses operating in remote areas, this may not work out so well.
    • You may also pay more for manually entering credit cards, due to the risk, and may be charged a higher fee for accepting foreign credit cards.
    • In order to use the card reader, you have to have a compatible device, which is usually a smart phone or tablet.
    • In addition, some of these processors may not allow you to access your money immediately, which can be an issue for a small business struggling with cash flows.[6]
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    Understand the costs. While using a card reader is simpler to set up and use than a traditional merchant account for most small business, this ease is made up for by the fees that these processors charge. Mobile payment processors, much like more traditional merchant accounts, charge a percentage on each sale. For merchant accounts, this is usually one to two percent. However, mobile processors may charge three percent or more. In addition, some of these processors have monthly fees, fees for the card reader itself, or refund fees.
    • Make sure you understand the costs involved before you make a decision to use a mobile card reader. You don't want to have any surprises once you've signed on to use a service.[7]
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    Locate and compare processors. The market for mobile card readers is large and still growing, as both startups and large corporations look to get into the game. When looking for a mobile processor, consider the pros and cons of each option, especially in accessibility and pricing. Some of the more popular processors are:
    • Square. Square is a very small card reader that can be attached to almost any smartphone. Square charges a flat transaction fee of 2.75 percent. The reader itself can be purchased at a number of retail stores. You get your money in 1-2 business days after the transaction.
    • Paypal Here. Paypal's mobile reader links up to transactions that are processed and stored in your vendor Paypal account. It charges a flat fee of 2.7 percent. With Paypal, your money is available almost immediately.
    • PayAnywhere. PayAnywhere is Wells Fargo's mobile payment service. It charges 2.69 percent on transactions unless you qualify for their storefront solution, which offers a free tablet and a 1.69 percent rate, but requires that you process $5,000 per month in transactions. You get your money in about a day with this service.[8]
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    Begin using your chosen processor. When you've decided on a mobile processor, make sure that you have an appropriate mobile device to use with the card reader. Then, visit the processor's website or a retail store to purchase their card reader. Follow the provided instructions to set up your account and begin accepting payments.[9]

Method 3
Considering Alternatives

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    Understand merchant accounts. A merchant account is a bank account used to receive funds from credit card and debit card sales. These accounts are set up with banks, who process the transactions and deposit the transaction balances, minus their fee, into the bank account of the vendor (the seller who accepted the credit card purchase). This is the traditional way for vendors to accept credit cards. It is cheaper than mobile processors, which involve an additional middleman, the aggregator. However, it also requires that a business have a certain credit history and sales volume. If your business meets this criteria, consider the following options for using a merchant account.[10]
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    Get a credit card terminal. A credit card terminal is the most common and in many cases the most cost effective way of accepting credit cards. These devices allow you to swipe a card, enter the transaction amount, and then finalize the transaction on the spot. They transmit information safely and effectively to your merchant bank and can also be used to provide your customer with a receipt.
    • Terminals can be obtained from your merchant bank for a fee, which is usually a few hundred dollars.
    • Terminals require connectivity to process, usually a telephone line.[11]
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    Use an imprinter to process credit cards manually. If you don't have access to an internet connection, but still need to process credit cards, you can use the old-fashioned method of accepting credit cards: an imprinter. This device creates a carbon copy of the credit card that you can then use the process the transaction later via one of the other methods, such as visiting a bank or entering them into a terminal. The downside is that you assume risk by carrying around copies of your customers' credit cards.
    • You can usually get an imprinter cheaply or for free from the bank where you got your merchant account.[12]

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Categories: Sales