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

If you have a telephone, an internet connection, a merchant account, and a virtual terminal, you can start taking payments over the phone today

If you want to maximise sales by taking payments over the phone, it is easy to do so with a virtual terminal, a device that’s connected to the internet and a merchant account.

Here, we explain what a virtual terminal does and how to use it, fees involved, regulations, and step-by-step process of taking payments over the phone.

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

Jump to sections of interest or read on for the full guide.

  1. Virtual terminals
  2. Taking card payments over the phone step-by-step
  3. Fees for taking payments over the phone
  4. Taking credit card payments over the phone regulations UK
  5. Taking payment over the phone GDPR
  6. Next steps

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.

Say 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

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. 2.9% + 30p 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. For example, a £8.29 monthly fee with Paymentsense will cover all transactions up to £50,000, while a £12.45 subscription will cover those up to £250,000

Which type of fee structure you choose depends on your unique requirements. 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.

If you’re looking for a card reader, get started with Square, the bespoke POS system built for UK businesses of all shapes and sizes.

Start selling wherever your customers are in just a few easy steps.

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More on taking payments 

Five tips to get started taking card payments – Andy Macauley, chief operating officer of Handepay, gives some concise pointers to taking card payments

Henry Williams

Henry Williams

Henry Williams is a freelance journalist specialising in small business topics, such as Making Tax Digital.

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Card Payments