Tips to securely accept credit cards over the phone

By accepting credit card payments on the phone, you're taking the risk that the person on the other end of the line is not the cardholder or an authorized user of the card. For example, you can't check photo ID like you and your staff should be doing for all in-person card transactions. The banks that issue credit and debit cards are likely to hold businesses responsible for fraud that occurs if they aren't following security protocols such as those best practices related to phone orders.

You should expect to pay more in processing fees for card-not-present transactions—including taking card payments over the phone—but there are some steps you can take to reduce your business's risk of falling victim to fraud.

Accepting credit cards by phone

There are a number of ways that you can accept credit cards over the phone these days. You can:

• Manually enter the customer's credit card information on your point of sale (POS) system or mobile payments device
• Accept a payment online for the phone order using a virtual terminal
• Email the invoice to your customer so he or she can pay using an online payments system

Securing your phone order card payments process

Here are some tips on how to most effectively secure your phone order payments process:

• Invest in a very secure POS system with the latest security technology in place.
• Choose a payments processor and a hardware vendor that are both reputable and highly experienced in your industry and in working with mail order merchants.

Require the following pieces of information for each card payment you accept over the phone:

• Complete card number
• Expiration date
• Security code / CVV code
• Billing ZIP code

On the signature line of the printed receipt for the order, instruct your staff members to write “Phone order.” Keep the paper receipt filed with the rest of your receipts and invoices.

When a customer places a phone order with your company that will be delivered, there are some additional steps you can take to help ensure the legitimacy of the transaction:

• Delivery confirmation. We recommend that you purchase tracking for the shipment, especially if it's a high dollar amount. Requiring an adult signature when the shipment is delivered is another step you may want to take for large orders. When you have a clear paper trail of the shipment and delivery, it is much more difficult for a customer to claim “goods not received” or that it was a fraudulent transaction.
• ZIP code match. If the ZIP codes of the billing address and the shipping address aren't the same, ask the customer why they don't. This should be done when they are on the phone placing the order. Their answer to this question should be logical—such as, needing the shipment sent to his or her office so someone can sign for it during business hours. If they don't have a quick, logical reason as to why the ZIP codes don't match, consider asking for another method of payment—or requiring that the package be sent to the billing address.