When a customer reads their credit card number to you, they are placing a significant amount of trust in your business. In the world of payment processing, these “card-not-present” transactions carry a higher risk of fraud, making security your top priority. Getting the process wrong can expose your business to costly chargebacks and damage your reputation. This is why knowing exactly how to take credit card payments over the phone the right way is non-negotiable. We’ll cover the essential security standards, the tools you need to protect cardholder data, and the simple steps to ensure every transaction is safe for both you and your customer.

Key Takeaways

• Get the Right Tools Before Taking Your First Call: To securely process phone payments, you need a merchant account to accept the funds and a virtual terminal to enter card information. This combination is the foundation for protecting your business and your customers.
• Make Security Your Standard Procedure: The best way to protect sensitive data is to never store it. Train your team to enter payment details directly into the virtual terminal during the call and immediately send a digital receipt to build trust and maintain a clear record.
• Understand the Unique Costs and Risks: Card-not-present transactions come with higher processing fees and a greater risk of fraud. Partner with a payment processor who offers transparent pricing and provides the tools and support you need to manage these challenges effectively.

What You Need to Take Credit Card Payments by Phone

Accepting credit card payments over the phone is a fantastic way to accommodate customers who prefer not to order online. It adds a personal touch and can make your sales process more flexible, especially if you take custom orders or provide services. But before you start taking down card numbers, you need to have the right systems in place to keep those transactions secure and efficient. Getting set up is straightforward, but it involves three key components: a dedicated merchant account, a way to process the payment, and a solid understanding of security standards.

Think of these as the foundation for building a trustworthy and reliable phone payment system for your business. When a customer gives you their card information over the phone, they’re placing a great deal of trust in you. Having the proper setup shows that you take their security seriously. It also protects your business from potential fraud and costly data breaches. With these pieces in place, you’ll be ready to offer your customers a convenient payment option while protecting their sensitive information and your company’s reputation. Let’s walk through exactly what you need.

Secure a Merchant Account

First things first, you need a merchant account. This isn’t the same as your regular business bank account; it’s a specific type of account that allows your business to accept and process credit and debit card payments. When you take an order over the phone, you’ll need a way to enter the card information manually into a secure system. This is where your merchant account and a payment gateway come into play. Getting a merchant account is the essential first step that makes it possible for funds from your customer’s card-issuing bank to be transferred to your business account. It’s the backbone of your entire payment processing operation.

Set Up Your Virtual Terminal

Once your merchant account is active, you’ll need a tool to key in the payment details. This is where a virtual terminal shines. A virtual terminal is essentially a secure webpage that lets you process payments from any computer with an internet connection—no physical card reader or special equipment is needed. You simply log in, enter your customer’s card information and the transaction amount, and submit it for processing. It’s an ideal solution for taking payments over the phone, processing mailed-in payments, or invoicing clients. Many virtual terminals can also integrate with your online store, helping you keep all your transaction data organized in one place.

Understand PCI Compliance Basics

Handling credit card information comes with a big responsibility: keeping it safe. That’s why understanding PCI compliance is so important. The Payment Card Industry Data Security Standard (PCI DSS) is a set of security rules designed to protect sensitive cardholder data from fraud and theft. When you take payments over the phone, you are handling “card-not-present” transactions, which have specific compliance requirements. Working with a provider that offers a secure and PCI compliant online payment portal is crucial. This ensures that every transaction is encrypted and handled according to the industry’s highest security standards, protecting both your customers and your business.

How to Process a Credit Card Payment Over the Phone

Once your system is in place, accepting a payment over the phone is a simple, three-step process. The key is to handle every transaction with a focus on security and clear communication. Following these steps consistently will protect your business, safeguard your customer’s sensitive data, and create a smooth, professional experience. From the moment you pick up the phone to the second you send the receipt, each action plays a role in building trust and ensuring the payment is processed correctly. Let’s walk through exactly what to do.

Step 1: Securely Collect Customer Information

First, you’ll need to gather the necessary payment details from your customer. Ask for their full name, credit card number, expiration date, CVV code (the three or four-digit number on the back), and the billing zip code. As you collect this information, it’s critical to prioritize security. Never write down credit card details on paper or store them in an unsecured file on your computer. The best practice is to input the information directly into your payment system as the customer provides it. This minimizes the risk of the data being lost or stolen and is a core part of maintaining PCI compliance.

Step 2: Enter Payment Details

With the customer’s information in hand, you’re ready to process the charge. You’ll type these details directly into your virtual terminal, which is a secure web-based portal for manually entering card-not-present transactions. Think of it as a digital version of a physical credit card terminal. Some payment processors also offer mobile apps that allow you to key in the card number on your phone or tablet. Whichever tool you use, double-check that you’ve entered all the numbers and dates correctly before submitting the transaction. This simple check can prevent declines and save you from having to call the customer back.

Step 3: Finalize the Transaction and Send a Receipt

After you submit the payment, your virtual terminal will immediately confirm whether it was approved or declined. Let your customer know the outcome right away. If the payment goes through successfully, confirm the final amount charged and ask for their email address or phone number to send a receipt. A digital receipt is essential—it serves as proof of purchase for the customer and a record for your business. Sending one promptly shows professionalism and helps build customer trust. It also provides clear documentation that can be helpful if a dispute ever arises down the road.

How to Keep Phone Payments Secure

Accepting payments over the phone is a fantastic way to serve your customers, but it comes with a responsibility to protect their sensitive information. These “card-not-present” transactions have a higher risk of fraud, which is why having solid security practices is non-negotiable. It’s not just about protecting your customers; it’s about protecting your business from costly data breaches, chargebacks, and fines.

Think of security as a three-legged stool: industry rules, smart data handling, and a well-trained team. When all three are in place, you create a secure environment that builds trust and keeps your payment process running smoothly. Getting this right from the start saves you major headaches down the road. The good news is that you don’t have to become a cybersecurity expert overnight. By following a few key principles and partnering with a payment processor that prioritizes security, you can confidently and safely accept credit card payments over the phone.

Meet PCI Compliance Requirements

If you accept card payments, you need to know about PCI DSS. It stands for the Payment Card Industry Data Security Standard, and it’s a set of rules designed to ensure that all companies that process, store, or transmit credit card information maintain a secure environment. Following these standards isn’t optional—failing to be PCI compliant can result in significant fines and, even worse, leave you vulnerable to a data breach.

The requirements can seem complex, but a quality payment processor does a lot of the heavy lifting for you. When you use a secure virtual terminal, the technology is already built to meet these strict standards. Your main job is to use those tools correctly and follow best practices to protect your business and your customers.

Protect and Store Cardholder Data Safely

This might be the most important rule of all: never write down a customer’s credit card information. A sticky note, a scrap of paper, or an unsecured digital file are all huge security risks. Once that information is written down, your business becomes responsible for protecting it, which dramatically increases your liability. The best way to handle sensitive data is to not handle it at all.

Instead, enter the customer’s payment details directly into your virtual terminal while they are on the phone. Modern payment systems use technologies like encryption and tokenization to immediately secure the data. The card number is converted into a unique code, or “token,” so the actual sensitive information is never stored on your systems. This protects the data and reduces your PCI compliance scope.

Train Your Team to Handle Information Securely

Your technology is only as secure as the people who use it. Every employee who takes payments over the phone must be trained on your security procedures. They are your first line of defense against fraud and data mishandling. Your training should cover the entire process, from greeting the customer to confirming the transaction is complete.

Create a simple script or checklist for your team to follow. This ensures they ask for the right information (like the CVV code and billing address) and enter it correctly into the virtual terminal. It also reinforces what not to do, like repeating a card number out loud or leaving the virtual terminal open and unattended. Consistent employee training is key to creating a secure payment culture within your business.

Understand the Risks of Taking Payments by Phone

Taking payments over the phone is a great way to serve customers remotely, but this convenience comes with a few risks. Because you can’t see the physical card, these “card-not-present” transactions are viewed as less secure by payment networks. Understanding these challenges helps you protect your business from fraud, disputes, and unexpected costs, ensuring every phone sale is a smooth and profitable one.

Prevent Fraud and Verify Identity

Without a physical card to swipe or dip, it’s easier for fraudulent transactions to slip through. That’s why it’s so important to confirm you’re speaking with the actual cardholder. Always ask for the full name on the card, the complete billing address, and the three- or four-digit CVV code. These extra verification steps are your first line of defense. Taking a moment to confirm these details not only protects your customer’s sensitive information but also safeguards your business from the financial and reputational damage of payment fraud. It’s a simple way to build trust from the start.

Manage Chargebacks and Disputes

Phone payments can sometimes lead to more chargebacks—when a customer disputes a transaction with their bank. This could be because they don’t recognize the charge or weren’t satisfied with the product. Simple human error can also be a trigger; if you accidentally type the wrong amount, it can cause confusion and lead to a dispute. To protect your business, double-check every detail before finalizing the payment. Always keep clear records of the transaction, including the date, time, and items purchased. This documentation is crucial if you ever need to challenge a chargeback and prove the sale was legitimate.

Account for Higher Fees and Human Error

You’ll likely notice that processing payments over the phone costs more than in-person transactions. Payment processors charge higher rates for these manually entered sales because the risk of fraud is greater. This increased risk, combined with the potential for typos during data entry, makes the transaction less secure from the processor’s perspective. These higher credit card processing fees are standard across the industry, so it’s important to factor them into your budget. Understanding this cost from the get-go helps you manage your cash flow effectively and avoid any surprises on your monthly statement.

Create a Better Customer Experience

Taking a payment over the phone is more than just a transaction—it’s a direct conversation with your customer. How you handle this interaction says a lot about your business. A smooth, professional, and secure process makes customers feel valued and confident in their purchase. On the other hand, a clunky, confusing, or insecure-feeling experience can make them think twice about buying from you again. The goal is to make the entire process feel easy and safe from their perspective.

Think about it: they’re trusting you with sensitive financial information. Your job is to honor that trust by being clear, efficient, and reassuring. This is especially true for businesses that rely on phone orders, like restaurants that do deliveries, contractors who take deposits for future work, or service providers with staff in the field. Every phone payment is an opportunity to strengthen your customer relationships. By focusing on creating a positive experience, you’re not just completing a sale; you’re building loyalty that encourages repeat business and positive word-of-mouth. This personal interaction can set you apart from competitors who rely solely on impersonal online checkouts. It’s a chance to show your customers that there’s a real, helpful person on the other end of the line, ready to make their life easier.

Build Trust with Clear Communication

One of the biggest advantages of a phone payment is the personal touch. Unlike an online checkout page, you can talk directly with customers, answer their questions on the spot, and even suggest other products they might like. This direct line of communication is your best tool for building trust.

When you pick up the phone, be friendly, patient, and clear about the process. Let them know exactly what information you need and assure them that their data is being handled securely. A calm, confident tone goes a long way in making a customer feel comfortable reading their credit card number aloud. This simple human connection can turn a routine payment into a positive brand interaction.

Make the Payment Process Effortless

From the customer’s point of view, the ideal payment process is quick and painless. Your goal is to guide them through it so smoothly they barely have to think about it. Once they’re ready to pay, clearly ask for their credit card number, expiration date, and the CVV code. As they provide the details, you can type them directly into your virtual terminal.

Read the total back to them for confirmation before you finalize the charge. This simple step prevents errors and shows you’re being thorough. By keeping the process organized and straightforward, you project an image of professionalism and competence, leaving the customer feeling confident that their payment was handled correctly and securely.

Offer Payment Links as an Alternative

Some customers just aren’t comfortable reading their card information over the phone, and that’s perfectly okay. For them, offering a payment link is a fantastic alternative that shows you’re flexible and prioritize their security. Instead of taking their details verbally, you can send a secure link directly to their phone or email.

The customer simply clicks the link and types their own card details into a secure, encrypted form. This gives them more control and peace of mind, as their information is never spoken aloud or written down by an employee. Providing this option demonstrates that you understand modern security concerns and are willing to adapt to your customer’s comfort level, which can significantly enhance their overall experience.

How to Choose the Right Payment Processor

Selecting a payment processor is one of the most important decisions you’ll make for your business. It’s not just about finding the lowest transaction rate; it’s about finding a true partner who can help you manage payments securely and efficiently. When you’re taking credit card information over the phone, the stakes are even higher. You need a provider you can trust to protect your customers’ data, support you when issues arise, and offer tools that make your job easier.

Think about what you truly need. Do you need a simple virtual terminal, or a more complex system that integrates with your accounting software? Are you looking for straightforward pricing, or are you interested in programs that can help you reduce processing fees? A great payment processor offers more than just a way to accept money—they provide security, support, and peace of mind. As you compare your options, focus on three key areas: the features they offer, the transparency of their fees, and the quality of their customer service.

Compare Processors and Key Features

First, make sure any processor you consider helps you follow PCI DSS security rules to keep your business and customer data safe. This is non-negotiable. Beyond security, look for features that fit how you operate. A clean, intuitive virtual terminal is essential for taking payments by phone. You’ll also want robust reporting tools that give you a clear picture of your sales and cash flow. Some processors offer custom payment solutions that can be tailored to your specific industry, which can be a huge advantage. Make a list of your must-have features before you start comparing providers.

Analyze Costs and Fee Structures

Let’s be honest: no one likes talking about fees, but it’s crucial. Accepting payments over the phone typically costs more than in-person transactions because there’s a higher risk of fraud when the card isn’t physically present. For example, some popular providers charge a rate like 3.5% + 15¢ for every manually entered payment. Don’t just look at the percentage rate; ask for a full breakdown of all potential fees. A transparent processor will explain everything clearly, from transaction costs to monthly service charges. Look for a partner who offers fair, understandable pricing and can explain how programs like cash discounts might help you save.

Look for Excellent Support and Service

When a customer’s payment is declined or you have a question about a deposit, the last thing you want is to be stuck in an automated phone menu. This is where great customer service becomes priceless. Before you sign a contract, find out what kind of support the processor offers. Can you speak to a real person when you need help? A provider who offers access to live support shows that they value your time and your business. You’re not just looking for a service provider; you’re looking for a partner who is invested in your success and is ready to help when you need it most.

Related Articles

• How to Accept Credit Card Payments: The 2026 Guide
• 6 Best Credit Card Machines for Phones (2025)
• 5 Ways to Accept Credit Card Payments Without a Machine

Frequently Asked Questions

Do I need any special hardware to take credit card payments by phone? No, you don’t need a physical card reader or any special equipment. The primary tool you’ll use is a virtual terminal, which is a secure webpage you can access from any computer with an internet connection. You simply log in and type the customer’s payment information directly into the form on the screen. This makes it a flexible and low-cost way to get started.

What’s the difference between my business bank account and a merchant account? Think of it this way: your merchant account is the bridge that allows money to travel from your customer’s bank to your bank. It’s a special account designed specifically to handle the processing of credit and debit card transactions. Your regular business bank account is where the funds are ultimately deposited after the transaction is approved and settled. You need both to accept card payments.

Why do phone payments cost more to process than in-person sales? Phone payments are considered “card-not-present” transactions, which means there’s a slightly higher risk of fraud since you can’t physically verify the card or the cardholder. Payment processors charge a higher rate for these types of transactions to cover that increased risk. It’s a standard industry practice, but knowing about it helps you factor the cost into your pricing.

What’s the most important security mistake to avoid when taking a payment? The single most critical rule is to never write down a customer’s credit card information—not on a sticky note, not in a notebook, and not in an unsecured computer file. The best and safest practice is to enter the details directly into your secure virtual terminal while the customer is on the line. This prevents sensitive data from being stored on your systems and greatly reduces your liability.

What should I do if a customer is hesitant to read their card number over the phone? It’s smart to have an alternative ready for customers who are uncomfortable sharing their details verbally. A great option is to use a payment link. You can generate a secure link from your payment system and send it to your customer via text or email. They can then click the link and enter their information themselves on a secure page, giving them complete control and peace of mind.